This article was originally published on 30 Nov 2016 by BELINDA GRANT GEARY FOR DAILY MAIL AUSTRALIA
- People looking to buy a house in Australia can expect a nationwide price increase of 6.6 per cent in 2017
- Experts have predicted the cost of buying a house will soar by 10.9 per cent in Sydney suburbs next year
- Those looking to buy in Melbourne won’t be hit as hard but economists have predicted a 6.6 per cent rise
- Property experts said median house prices reached record heights in both Sydney and Melbourne in 2016
- The predicted boost could increase the median cost by $116,400 in Sydney and $51,062 in Melbourne
Australians looking to buy a house in Sydney and Melbourne can expect prices to continue soaring in 2017 after both capitals showed consistent growth this year.
House prices across the nation are expected to rise by 6.6 per cent in 2017, with estimates indicating values will have risen by 7.9 per cent by the end of this year.
CoreLogic and Moody Analytics claim the nation-wide boost has been fuelled by a booming property economy in Sydney and Melbourne, which will see houses in both capitals jump by 10.9 and 6.6 per cent respectively in the coming year.
But with the median price already reaching new heights in 2016, those purchasing a property in 2017 may be forced to spend tens, even hundreds of thousands more than if they bought this year.
In September, the Domain Property Report said median house price sat at $1,068,303 in Sydney and $773,669 in Melbourne.
If CoreLogic’s predictions are correct Sydneysiders the median price of a home could rise by $116,400, while Melburnians could fork out $51,062 more than they would have this year.
A renovated home in Leichhardt, a suburb in Sydney’s inner west, on the market for $1.7million could sell for $185,300 more, while a retro terrace house quoted at 1.4 million in the inner city suburb of Paddington could rise by $152,600.
Emily Dabbs, economist at Moody’s Analytics, said low interest rates on home loans and job growth in Sydney will ensure steady growth in the New South Wales capital.
‘One of the bigger drivers of house price growth in Sydney and Melbourne is low interest rates and higher demand in those markets than the rest of the country,’ she told Daily Mail Australia.
She said demand remains high as both cities offer varied job opportunities and growth in employment, which attracts more people to live in the areas.
Melbourne is expected to peak at 10.4 per cent growth in 2016, and while that will slow next year there is still forecast to be a 6.6 per cent jump in 2017.
That predicted 6.6 per cent rise would see a two-bedroom Edwardian home in Maidstone, west of Melbourne’s CBD, sell for $39,600 more than the $600,000 quoted this year.
While buyers interested in a $1.2million three-bedroom brick home in Prahran, a south-eastern suburb of Melbourne, could pay $82,500 more in 2017.
Ms Dabbs said the housing market in Sydney is likely to go through a ‘period of moderation’, with Melbourne also predicted to ‘stagnate’ over the next few years.
The last time housing prices dropped in either city was 2012.
Ms Dabbs said the forecast is determined by long-term pricing trends and predictions of income and population growth so homes of different sizes can be compared.