Sydney Set For Property Boom

Sydney is set for a housing boom next year, driven by falling interest rates and improved market sentiment.

SQM predicts prices will rise by between 15% and 20% in Sydney, double that of the next fastest growing city, Perth. Prices there are expected to rise by between 4% and 8%. The average across all capital cities is expected to be between 7% and 11%. This contrasts with the expected rise in 2013 of between 6% and 9%. The forecast is predicated on their being a rate cut in the middle to late part of 2014.

SQM believes the boom will create a challenge for the Reserve Bank of Australia as it decides on how to manage rates, particularly if the wider economy becomes sluggish.

JP Morgan has offered a less optimistic forecast, predicting Sydney price increases will be at around 5%.

It said that gains across the country will be moderate and that housing will not put pressure on the Reserve Bank.

Source: http://www.theaustralian.com.au/business/property/sydney-on-track-for-property-boom-prices-set-to-rise-20pc-says-sqm/story-fn9656lz-1226721006886