This article is from the Australian Property Journal archive
A well known Melbourne real estate agent has shocked many property analysts by predicting Melbourne’s house prices could jump by as much as 15% over the next 12 months.
While most leading property and financial analysts believe house prices across the country will move with inflation with an average price rise on average of 3% a year for the next few years, managing director of Melbourne agency Hocking Stuart, Greg Hocking yesterday said investors returning to the market could push Melbourne house prices up 10-15% in the coming 12 months.
Hocking said 2006-2007 would see the market continue the 2006 revival that had seen prices grow strongly again three years after the market peak of mid-late 2003.
Most analysts dismissed Hocking’s crystal ball gazing as wishful thinking.
However, Hocking said investor interest that was being pushed on by low vacancy rates and climbing rentals that was more than compensating for the interest rate rise and pushing average yields above the 3%-4% barrier for the first time in several years.
“Capital growth has returned to the investment market and this is always a good sign for the health of the market in general. As buyers move into the market house prices rise and investors that moved early in the cycle will see excellent returns.
“At the other end of the market the shortage of prestige properties at the top end of the market is also pulling the market higher as buyers are priced out of the core suburbs and into neighbouring areas.
“Both sectors of the market are being driven by the stock market and the low levels of unemployment that have seen rising incomes throughout the community,” he said.
Hocking said the market for established homes would shrug off a further interest rate rise, but the new home buyer market was always more rate sensitive.
“It just won’t happen,” one analyst told Australian Property Journal last night.
By Kathryn O’Meara
