The housing market will continue its strong momentum well into 2015, a leading real estate expert has predicted.
According to the analysis by SQM Research owner Louis Christopher, prices in Australia’s eight capital cities still have room to move over the coming 12 months.
Mr Christopher forecast an average price rise of five to nine per cent, assuming the official cash rate stayed at 2.5 per cent, the economy remained steady and the Australia dollar remained above US$0.85.
In this scenario, Sydney would continue to record outstanding growth of eight to 12 per cent.
Melbourne would grow at five to nine per cent and Brisbane at five to eight per cent.
There would also be price rises of four to seven per cent for Adelaide, three to six per cent for Hobart and one to four per cent for Perth.
However, the two territory markets could potentially go backwards.
Canberra’s price movement has been forecast to fall between a two per cent decrease and a three per cent increase, while Darwin would range from a three per cent drop to a one per cent rise.
Mr Christopher said there was no need to fear a pricing bubble while prices remained high.
“The market is somewhat overvalued, but not by as much as some have very publicly stated. I don’t believe at this stage the market is in a bubble,” he said.
“Some cities are heading into overvalued territory, but the point overall is the market is far from a bubble situation when taking into account historical valuations over the past 30 years.”