While the Melbourne market experienced dramatic growth last year, RP Data expects the trend will ease, with capital cities Brisbane, Perth, Adelaide and Sydney all set to outperform Melbourne over the coming year.
Speaking at the Australian Banking and Finance innovation conference in Sydney yesterday, RP Data national research director Tim Lawless said the Melbourne market has experienced 20 per cent growth in property prices since 2007.
“Melbourne has had an extraordinary run of growth,” he said.
According to Mr Lawless, key drivers like low interest rates, good rental yields and first home buyer benefits all contributed to the capital city’s growth spurt.
However, he said Melbourne will “come off the boil” over the next 12 to 18 months.
“Melbourne is probably not going to be performing at a top level – probably underperforming – but we will start to see some of the other cities that haven’t shown strong performance like Brisbane, Perth and Adelaide, which still have plenty of drivers.
"Western Australia and Queensland are still very much driven by the resources sector, which will continue to support property price growth in those states."
Meanwhile, Mr Lawless said that South Australia still has the lowest rate of unemployment together with a lot of infrastructure projects, all of which will contribute to solid growth performance over the next year or so.