Friday, 28 March 2008

[PropertyInfo.026] House prices to rise 40% in 5 years time?

"HOUSE prices are expected to rise by as much as 40 per cent across the country during the next five years, according to economic forecaster BIS Shrapnel."

That's according to "Housing affordability set to get even worse" from news.com.au.

The article also mentioned:

"In the 10 years before that house prices rose an average 6 per cent a year."

"In the past 20 years they have risen an average 7.9 per cent a year."

There's also another article titled "Land the issue, not prices" from Sydney Morning Herald today, that talks about:

"...the Reserve Bank shunting the blame on to governments that have given money to homebuyers while retarding the supply of land"

Indeed, if the government is giving out money but does not release enough land, the land price can only go up in the long run. Based on that, no wonder the house price would go up more than 40% in 5 years...

4 comments:

Fred@OPC said...

I guess I would think that such a policy would tend to lead to both housing and wage inflation. It would be interesting to see the predicted relative rise in housing vs. other goods and income. 40% seems high but if everything is going up at record rates, 40% might not be so bad.

Allan said...

yes, government need to think more about long term solutions (like the superannuation one is quite good compared to other countries). Quick and dirty fixes like this, mainly to attract attention or other purpose (get elected?), is hurting everyone in the long term.

From what I heard, nothing seems to be rising as high as the house price in the past years. That's why almost everyone wants to get into housing market.

ask said...

There are plenty of land available. The problem is... no one is moving to the west or south west. Many building companies are struggling to sell their houses in those areas.
I say... stop releasing new lands. Create more jobs in Parra, Penrith and Camden!

- devank

Allan said...

don't quite agree with you devank, if the infrastructure were setup properly, with ample roads and transportation, people will certainly be willing to move to further west.