The next three years look to be sluggish for Sydney, as home prices are expected to rise by a measly 3% by 2021 – the slowest growth rate amongst capital cities – according to analysts at BIS Oxford Economics.
The latest report from the institution noted that the housing sector will continue trending downward in the short term.
ABC News reported that while BIS expects prices to be soft, there is no reason for property buyers to celebrate, given that the correction would likely be toned down by the low-interest rate environment and the relatively stable economy.
BIS expects Sydney's median home prices to decline by 2% over the next financial year but says a major fall is unlikely as the city will be supported by an undersupply.
"By 2019/20, a combination of the correction in prices, the undersupplied market and some improvement in the economic outlook is forecast to see prices stabilise, and potentially show modest rises into 2020/21," the report read, as quoted by ABC News.
First-home buyers remain the city's saviour as they support the market's unit prices. However, unit prices are still pegged to decline by 4% this year and by another 3% over the next financial year.
Another city that is expected to disappoint is Darwin. After peaking in 2014, median home prices have fallen from $620,800 to $505,000.
The slowdown in the Northern Territory capital was due to the easing of the construction boom, which contributed to the housing oversupply.
Three capital cities are seen to realize strong price gains over the three-year period: Brisbane, Canberra, and Perth.
BIS said Brisbane is poised to record the strongest performance in the short-term, with median home prices jumping by as much as 13% to $620,000.
Despite apartment oversupply concerns, the Queensland capital is expected to be supported by a boost of interstate migrants particularly from New South Wales.
Canberra and Perth are predicted to reflect 10% growth in median home prices to $770,000 to $570,000.
Related Stories:
Darwin housing market likely to see recovery next year
Has the NSW stopped caring about housing affordability?
Collections: Mortgage News
Share