Australia's property market is recovering with vigour thanks to the strengthening employment sector, according to CB Richard Ellis.
The company’s executive director of research for the Pacific Region, Kevin Stanley, said the employment base in Australia had already recovered from the downturn with rates of growth now returning to trend.
According to Mr Stanley, the improvement in employment confidence will help buoy rental growth across the nation’s capital cities over the next 12 months.
“The one thing that stands out is the growth phase in employment, with Australia at least a year ahead of the rest of the world,” Mr Stanley said.
Mr Stanley said CBRE had brought forward its forecasts for rental growth by 12 months, with the spike in rents now expected to occur next year as opposed to 2012. CBRE’s revised forecast is for rental growth to average 6.7 per cent from 2010 to 2012.
CBRE has also forecast capital values in the Sydney CBD to grow by an average of 10 per cent per annum between 2010 and 2012.
“The income growth promise in Australia is the big motivator and while the market will continue to be dominated in the short term by equity investors we expect to see a gradual return of bank lending, with a very cautious letting off of the screws by the banks in the next few years,” Mr Stanley said.