Ben Hurley Reporter

Ben covers the property industry and has a keen interest in entrepreneurship and travel writing. He speaks Mandarin and previously covered housing and urban affairs for The Australian Financial Review.

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Perth and Darwin property to rise most next year

Published 13 December 2012 15:13, Updated 14 December 2012 04:57

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Perth and Darwin property to rise most next year

Darwin homes will likely rise in value by 5 to 7 per cent next year, according to Australian Property Monitors. Photo: Glenn Campbell

Housing markets in Perth and Darwin are the places to invest in 2013, according to a market analysis by Australian Property Monitors, while most other capital cities will barely outpace inflation.

While house prices nationally are tipped to rise by 3 to 5 per cent over the coming year, Perth and Darwin homes will likely rise in value by 5 to 7 per cent, according to APM.

The predictions follow a flat year for housing, where homes rose by just under 1 per cent in the 10 months to October, falling in real terms. Low interest rates, particularly after the latest December cut which brought the cash rate to 3 per cent, would boost buyer confidence and improve affordability. But this was offset by rising cost-of-living pressures owing to government budget cuts and increased energy costs.

“Overall, markets have stepped forward modestly into recovery in 2012 with the prospect of this trend continuing in most capital cities,” says APM senior economist Andrew Wilson.

He predicts the weakest housing markets to be Melbourne, Adelaide, Hobart and Canberra, which would see little to no value growth.

But he says falling interest rates and increased affordability are creating opportunities for investors who take a longer-term view.

“We are seeing increased investor activity in both Sydney and Brisbane,” Wilson says.

While Melbourne’s market was generally subdued, there remain pockets of strength, Wilson says.

“There’s no sign of the prestige market slowing down in Melbourne,” he says. “We’re not talking a boom but we’re still talking some reasonable buyer activity in that upper-end market.”

But the high-end markets in other capitals would probably remain weak.

He said government grants targeting new homes would see a rise in apartment buying, particularly in Sydney.

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