Investment outfit Capspace has revealed that house prices are due to rise in Australian capitals in the next two years, as population growth continues to outgrow the number of new homes being built.
Conducted by Performance Property for Capspace, the research sheds further light onto the ongoing housing crisis, finding that building approvals are not keeping up with demand. Capspace Managing Director Tim Keith anticipates that the east coast will feel the pinch over the next two years.
“Continued evidence of supply chain issues and the cost of construction means the unit and housing markets continue to be in an undersupplied position, with overseas skilled migration likely to help push demand for housing higher,” he says.
“Strong rental growth is still evident across the country for housing across most capital cities, with the current national vacancy rate sitting below two percent. As of March 2024, national dwelling approvals sit at 162,640 for houses and units.
“Performance Property’s analysis reveals that building approvals are simply not keeping up with population increases. We saw a direct increase over the last 12 months of 303,000 skilled migrants moving to Australia.
“This will put further pressure on rental markets nationally. Evidence of further increases to net interstate migration for Queensland and Western Australia are positive and that could make an argument for investors to get more exposure to these capital cities for further diversification.”
