McGrath Real Estate chief executive officer John McGrath has said he expects house prices to rise by as much as 10 per cent in 2010.
Speaking to journalists, Mr McGrath said Australia would see close to double digit increases in most parts of the market.
“I’ve been expecting 8 to 10 per cent increases in Sydney, and in some areas, it will be well beyond that,” he said.
“Historically, rates are still low. Of course we’re expecting some more rises, which we’ll see in a short space of time. But we’re finding 7 to 9 per cent is what most people are used to in terms of the mortgage cycle, so that will still be at the bottom end of that range.
House prices across Australia’s eight capital cities rose 6.2 per cent in the third quarter of 2009 from a year earlier, snapping three straight quarterly declines, according to the Australian Bureau of Statistics.
Mr McGrath said limited housing construction could hurt the Australian property market by causing prices to rise too quickly and cause a potential housing bubble.
“There has been very little construction over the past few years. While home building rose towards the end of 2009, the building cycle is a slow one, so I suspect that over the next couple of years, there will continue to be a lack of supply. But there is development opportunity in abundance, once the lending frees up, and people start building again,” he said.