Property prices are forecast to keep rising on the Gold Coast into 2022 and beyond
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Property prices are forecast to keep rising on the Gold Coast into 2022 and beyond
With the Australian economy experiencing stronger than expected recovery and growth continuing, property prices are forecast to keep rising with record high prices escalating well into 2022, and it’s possible it could continue to climb even after that.
Louis Christopher, founder of SQM Research, says there are more property buyers than sellers and with the Reserve Bank of Australia re-affirming interest rates are likely to stay low for a long time, the evidence “suggests the market is going to continue to go up from here; particularly for free-standing houses”.
GCPN has reported prices in regional areas like the Gold Coast are still climbing but are still very affordable compared to Melbourne and Sydney, which is likely driven by those working from home in the wake of the coronavirus pandemic, and definitely driven by people wanting a cleaner warmer lifestyle change with cheaper housing compared to Melbourne and Sydney.
South East Queensland is by far one of the best choices to invest and live as the corridor from The NSW border and Brisbane continues to link up, and clean manufacturing and infrastructure converts the region into a liveable region, not just a tourist attraction.
SQM Research’s Christopher says the return of property investors to the market could signal that we are now nearer the end of the price rise cycle than the start.
Usually, price growth cycles start with first-home buyers, then upgraders join in and, finally, investors come into the market, attracted by the prospects of capital gains, Christopher says.
There is another factor that could help dampen price rises, Christopher says. The Australian Prudential Regulation Authority could “tap the brakes” on home lending, by putting restrictions on lenders. It did that in 2015, continuing the policy until prices peaked in 2017.
In October 2018 we had the GFC, so watching trends is important but there is no rule book and researchers do not have a crystal ball so staying alert and not over capitalising is important
Shane Oliver, chief economist at AMP Capital, expects property prices to keep rising until 2023, when we could see the start of another cyclical downturn as interest rates move up more decisively.
Lenders are already starting to increase their 2 and 3 year fixed mortgage interest rates, after earlier increasing their 4 and 5 year fixed rates.