House prices in major Australian cities are forecast to grow

House prices in major Australian cities are forecast to grow by about 20 per cent between now and 2012, according to a report from mortgage insurer QBE Lenders’ Mortgage Insurance (QBE LMI).

QBE LMI’s Housing Outlook report for 2010 to 2012, researched by BIS Shrapnel, confirms that recent low interest rates had helped to alleviate mortgage pressures on households, while bringing housing affordability back to its most attractive level for almost a decade.

QBE LMI chief executive Ian Graham said low interest rates, solid growth in rents and housing shortages would create favourable conditions for a strong recovery in residential property prices through to 2012.

“Double digit house price growth is forecast across all capital cities from June 2009 to June 2012,” Mr Graham said.

QBE LMI said Sydney house prices were forecast to grow by 21 per cent between now and 2012.

Melbourne’s house prices were expected to grow by 19 per cent, price growth in Brisbane was forecast at 15 per cent, and Adelaide house prices were predicted to grow by 23 per cent.

Lower growth of 12 per cent was projected for Perth, influence by a decline in investment in the resource sector after the record levels seen in recent years, Mr Graham said.

QBE LMI is a mortgage insurer that operates in the Australia, New Zealand and Hong Kong markets. Its parent, the QBE Group, is listed on the Australian Stock Exchange and has offices in 45 countries throughout the world.

.