House prices have risen by 3.4 percent in Jan & Feb so far this year despite recent interest rate rises and warnings on further rate increase from the Reserve Bank of Australia. At this rate, we might see 20% increase in house prices across Australian capital cities in 2010.
The RP Data/Rismark Hedonic Home Value Index found that after a 2 percent price increase in January, prices rose by a further 1.4 percent in February.
In the 12 months to February, Australian capital city dwelling values rose by 12.7 percent, pushing the average Australian dwelling price up to $455,000, RP Data said.
The average house has increased in value by $5000 every month in the past 12 months.
Prices are continuing to rise on the back of demand from a growing population outstripping housing supply.
“The housing market has been undeniably buoyed by population growth of 2.1 per cent per annum, which is among the strongest in the developed world,” said Rismark CEO, Christopher Joye.
So though Reserve Bank governor Glenn Stevens warned investors and homebuyers that property investment is not a risk-free strategy, I have to say it is very much likely that we will see a 20% increase in housing prices in 2010.