Get it right.

House prices to rise by 10pc: McGrath

Jan 23, 2010-01-26

McGrath Real Estate chief executive officer John McGrath has said he expects house prices to rise by as much as 10 per cent in 2010.

Speaking to journalists, Mr McGrath said Australia would see close to double digit increases in most parts of the market.

“I’ve been expecting 8 to 10 per cent increases in Sydney, and in some areas, it will be well beyond that,” he said.

“Historically, rates are still low. Of course we’re expecting some more rises, which we’ll see in a short space of time. But we’re finding 7 to 9 per cent is what most people are used to in terms of the mortgage cycle, so that will still be at the bottom end of that range.

House prices across Australia’s eight capital cities rose 6.2 per cent in the third quarter of 2009 from a year earlier, snapping three straight quarterly declines, according to the Australian Bureau of Statistics.

Mr McGrath said limited housing construction could hurt the Australian property market by causing prices to rise too quickly and cause a potential housing bubble.

“There has been very little construction over the past few years. While home building rose towards the end of 2009, the building cycle is a slow one, so I suspect that over the next couple of years, there will continue to be a lack of supply. But there is development opportunity in abundance, once the lending frees up, and people start building again,” he said.

Jack Henderson says …

But if we consider that John is talking about the median, then, by definition, there are plenty of properties below the median, plenty more on the median AND PLENTY ABOVE THE MEDIAN.

How do you identify the latter???

Call me on +61 3 9867 4450 or +61 411 75 22 16.

I’ll tell you how.

Jack

A medium of $1,000,000. Who would have believed it ????

Median house price to top $1m in 10 yrs
Friday, 15 January 2010


Sydney’s median house price will top $1 million before the decade is out, new data from Residex has found.
Just a decade ago, Sydney’s median house price was $328,000 with few believing it would surpass $500,000. It is currently around $630,000.
Residex chief executive officer John Edwards said this level of growth is expected to continue throughout the decade, which would take properties to approximately $1.2 million.


“Traditionally, Sydney houses have experienced a price growth of 8 per cent. Over the past couple of years, this level of growth has fallen to approximately 6.5 to 7 per cent,” Mr Edwards told Real Estate Business.
“But, even if we calculate what the median house price would be at the end of the decade based on this lower growth rate, we should still see properties in the inner city top $1 million before 2019.”
Mr Edwards, said a one million price tag on a Sydney property would force a lot of Australians to rent because they simply would not be able to afford a house in the inner city.


“Blue-collar workers would be pushed out of the bottom end of the market and into rental property. Those employed in lower middle management would be forced to move into cheaper homes, while middle and upper management would buy typical housing stock,” he said.
However, it is not just Sydney dwellers that would be faced with unaffordable homes.
“Melbourne is currently 10 years behind Sydney, however, it is gaining on the city fast. I expect by 2019, Melbourne will only be five years behind Sydney in terms of house prices.”


Berowra based Professionals real estate senior salesperson Laurie Castorina said looking at the current dwelling price growth, it is highly likely that median house prices in Sydney will top $1 million in less than 10 years.
"Land is becoming increasingly scarce, which consequently pushes propertysky high," Mr Castorina said.
"While I think wages will have to increase significantly in order for people to comfortably afford property prices over $1 million, the fact of the matter is people will always want to buy property, regardless of the price tag that comes with it."

WHO WOULD HAVE THOUGHT, EH???