House prices won’t slow down until 2018

Adam Smith 4 January 2017

home loan saving houseBooming house prices are set to continue throughout the year before grinding to a halt in 2018.

That’s the prediction of SQM Research managing director Louis Christopher, who told the Australian Financial Review 2016’s house price growth is unlikely to stop in 2017.

According to the AFR, Christopher believes capital city house prices will rise between six and 10%, with Sydney, Melbourne and perhaps even Hobart experiencing double-digit growth. Other capital cities are also set to see growth, Christopher forecast, with the exception of Perth and Darwin where he has predicted steep declines.

Strong end to 2016

Christopher said weak supply is likely to spur continued growth.

"We're getting around 90,000 new people coming to both Sydney and Melbourne every year. They all need accommodation and quite a lot of them have some home purchasing power,” he told the AFR.

But Christopher said 2018 could see a price correction. He told the AFR that 2017 could end with housing markets in Sydney and Melbourne “dangerously overheated and overvalued”.

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