3 years of Property Growth predicted for Brisbane

Friday, 01 July 2011 07:52 Last Updated on Friday, 01 July 2011 07:57 Written by Ashley Hooker

Brisbane's housing bubble won't burst for three more years, analysts say.
Potential home buyers hoping for Brisbane's property market bubble to burst may have to wait another three years, says a leading economic forecaster.

BIS Shrapnel has predicted the market will turn around this financial year with an impending mining boom, but warns aggressive interest rate rises could see property prices fall in 2014.

BIS Shrapnel analyst Angie Zigomanis said Brisbane's median house price was tipped to increase 15 per cent from $440,000 to $505,000 over the next three years.

Mr Zigomanis said rising interest rates would limit the average annual price rise to 4.7 per cent, although buyer confidence was likely to improve with the second-wave mining boom.

"In this environment, the strong outlook for employment and income will encourage purchaser demand and maintain upward pressure on prices, similar to the previous upturn ahead of the peak in 2008, when booming economic conditions continued to underpin purchaser confidence despite rising interest rates," he said.

“As a result, a mild improvement in prices is forecast in 2011/12, and this will pick up in 2012/13 as the economic upturn gains traction and the underlying dwelling deficiency becomes more pronounced."

Brisbane's property market, which is bearing the scars from the end of the first home buyer's grant boost last year, a marked fall in interstate and overseas migration and the summer floods, is among the weakest of all Australian state capitals.

Mr Zigomanis said this would benefit first home buyers in particular.

"In any event, this period will allow future first home buyers to build up their deposit and take advantage of softer house prices," he said.