A new report from QBE LMI forecasts Brisbane to achieve the highest growth rate of all capital cities in the three years to June 2018.

QBE’s Australian Housing Outlook 2015-2018 reveals Brisbane’s continuing affordability will result in the median house growing from $511,300 as at June 2015 to $575,00 in June 2018 – a 12% jump.

Sydney’s median house price is forecast to increase from $1.034 million at June 2015 to $1.11m by mid-2016 before decreasing to $1.055m by June 2018.

In Melbourne, the report forecasts a slower rate of growth from the past two years, with the median house price set to increase by 5% to $770,000 by June 2016.

And in Perth, both the housing and unit markets are estimated to weaken in light of rising stock surplus and the slowing state economy, with the median house price to drop by 10% in the three years to June 2018.

“BIS Shrapnel’s research predicts there will only be a mild correction to median house prices during the forecast period of 2015-2018 in Perth and Darwin, with compound growth in median house prices in all other capital cities: Sydney, Melbourne, Adelaide, Hobart and Brisbane. A number of regional cities are forecast to outperform the capital city in their state.”

And looking at the next 12 months, the report predicts demand in some markets to ease, with the exception of Sydney (7% increase), Melbourne (5% increase) and Brisbane (5% increase).

“Perth and Darwin will feel the impact of a softening economy, which will further reduce demand, resulting in a correction in median house prices. Darwin, Perth and Adelaide are all expected to see shallow growth. Hobart and Canberra are forecast to experience some stability after prior weakness, with interstate migration flows expected to improve.”

In the current residential cycle, the report highlights Sydney and Melbourne are the current standout performers thanks to the investor market, which represent half of the national market.

Source: GHK Real Estate