House prices in Australia are expected to continue their positive momentum for at least another three years, according to BIS Shrapnel chief economist Frank Gelber.
The forecast follows a record month for auctions and hefty sales.
Mr Gelber told The Age that he expected the housing market to continue its growth and, unless action was taken to address the burgeoning demand for homes, Australia risked facing a “price bubble.”
Mr Gebler also said agents were set for a record December on the back of rising house prices.
The median house price in Melbourne has climbed by 12.5 per cent since March 2009.
While prices did slip at the onset of the global financial crisis, swift rate cuts from the Reserve Bank of Australia (RBA) and beefed up first home buyers' grants allowed the market to maintain its momentum and Mr Gelber said the demand was now being fuelled by demand from investors and those looking for an upgrade.
He also said it is the first time since 2003 that there hasn't been a brake on the property market.
''Every time the market wanted to break out, something stopped it,'' Dr Gelber said.
''Interest rate rises, the financial crisis - prices started to rise and then they were stopped again.
''Now there's nothing to stop it. The trouble with keeping a lid on a pressure cooker is that when it comes out it comes out really strongly.''