Australian Housing Outlook 2010 - Brisbane to grow by 15% to 2013

This annual report is compiled by BIS Shrapnel and QBE Lenders Mortgage Insurance. QBE's involvement in this report is very important because they insure and protect our banks from losses if a property is "sold up" for less than the loan amount. When you consider the enormous number of loans that are made at 95% of the property value you can see how important it might be for QBE to understand the future value of property.

Doomsday subscribers

If the doomsday subscribers were correct and the Australian Residential Property market's value dropped by 20-30%, QBE would be faced with the resultant flood of claims and losses. That is why the Australian Housing Outlook 2010 has credibility. From early on in the Global Financial Crisis, QBE and BIS Shrapnel were concluding that Australian property values would not decline. Market data on performance since has proven them to be correct.

Below is the Press Release issued with the report's release:

The continued improving economic environment is expected to facilitate further house price growth over the next three years. QBE LMI's Australian Housing Outlook report (researched and written by BIS Shrapnel) forecasts the strongest growth to be in Perth, Sydney and Adelaide, with all three cities to experience median house price rises of around 20% during this period.

More moderate house price growth is expected during the three years to June 2013 in Brisbane (+15%) and Hobart (+13%) where affordability is not as strained or there is substantial dwelling deficiency; with the weakest price growth occurring in cities with constrained affordability and fewer pent up demand pressures including Darwin (+12%), Canberra (+10%) and Melbourne (+9%).

Ian Graham, CEO of QBE LMI, said "We saw the Australian housing market gain momentum in 2009 due to a combination of factors, including the First Home Owner's Grant Boost Scheme (FHOGBS) and record low interest rates. The expiry of the FHOGBS at the end of 2009 and several interest rate rises between October 2009 and May 2010 had the effect of moderating house price growth in the first half of 2010."

"The decline in first home buyer demand in the first half of 2010 is primarily due to first home buyer activity being pulled forward into 2009 because of the FHOGBS. However, demand is forecast to return to more normal levels, believed to be around 130,000 to 140,000 loans approved, in 2011" said Mr Graham.
"Future median house price rises will be underpinned by a deficiency of dwelling stock across most capital cities, which in turn will lead to tight vacancy rates and solid rental growth, flowing through to investor demand" said Mr Graham.

Mr Graham added, "QBE LMI has supported the Australian mortgage market for over 45 years, and we will continue to support borrowers and mortgage lenders as the housing market continues to grow. We give mortgage lenders the security and confidence to lend to credit worthy borrowers up to 95% Loan to Value Ratio (LVR), enabling many Australians to realise the dream of owning their own home." 

Press Release Source: http://www.bis.com.au/news/lmi__2010_mr.html

Preceding Comments by: Property Searchers

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