Strong population growth, an under-supply of new dwellings and rising rents will continue to be a factor of most Australian residential markets in 2008, according to the latest issue of Westpac’s `Outlook for Australian Property Markets’.
The Outlook, released this week, predicts that while the demand for residential property – particularly new housing – is likely to be slower this year, it will be kept strong by continued high growth in population.
Westpac Property says that supply remains below requirement in most markets and low vacancy in the rental market is unlikely to ease.
“Strong rental growth should lift yields, although higher interest rates will probably take most of the rental gain.”
The Outlook predicts that the undersupply will result in residential rents rising in 2008 by another 10 per cent in Sydney, Brisbane, Melbourne and Perth, 8 per cent in Adelaide, up to 13 per cent in Canberra.
Affordability is to remain an issue in all markets through the forecast period, according to the report, which is available for download from the Westpac website.