BRISBANE housing prices are tipped to continue their upward trend this year but affordability is getting harder.
The Fitch Ratings’ Global Housing and Market Outlook found that although Australian housing is still expensive by global measures, national prices are forecast to rise by a “moderate” 4 per cent in 2014, compared with a 9.8 per cent in the 12 months to December 2013.
However, Fitch director Ben Newey said Brisbane house prices could see a sharper increase this year as the market followed Sydney and Melbourne trends of the past 12 months, which would impact on housing affordability.
“House prices have risen nationally in 2013, driven by the effects of the Sydney, Melbourne and Perth markets,” Mr Newey said.
“Given where other cities have been, Brisbane could potentially follow.”
He said that during the past year, house-price-to-income ratios had deteriorated due to the pick-up in house prices.
Real Estate Institute of Queensland CEO Anton Kardash predicted median prices to rise over the next six months after increased sales activity in the last three months of 2013.
“All indicators are very positive for the market at the moment,” Mr Kardash said.
The Fitch report said that both Brisbane and Adelaide were more affordable than other Australian cities, with house-price to gross-income ratios of 6.5 times, compared with Sydney and Melbourne, with ratios of 9.9 and 9.1 times respectively.
First-time buyer activity had fallen to historical lows, reflecting the inaccessibility of housing to lower-income households.
“On a house-price-to-income ratio, Australia is quite expensive but we have been on that level for 10 years or so,” Mr Newey said.
“Potentially, over time, as house prices grow slightly faster than the rate of income growth, affordability will become more difficult. We’re not seeing it as a housing bubble, more that major capital cities around the world have a higher house-price-to-income ratio (than other areas).”
The report said dwelling prices in Brisbane and Adelaide were expected to follow the other major cities upwards, after relatively low levels of growth in the past five years.
House price growth in Sydney, Melbourne and Perth is expected to continue to be positive, though at a slower rate than that experienced in 2013.
Mortgage arrears were predicted to increase slightly across Australia as unemployment rises.
The Global Housing and Mortgage Outlook report compares house prices and affordability around the world by looking at house price/income ratios, house price/GDP per capita, and house price/rent.
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