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Australian Property Prices set to rise 30% in 2011

An undersupply in the Australian property market will force residential property prices up by 30% in the country according to Frank Gelber, chief economist at BIS Shrapnel.

Quoted in the Sydney Morning Herald, Gelber said “we haven't got a bubble in our residential market. We're undersupplied, not oversupplied … [House] prices will go up another 30 per cent over the next three years.”

“We’re not over-geared, we’re not overvalued and we’re not oversupplied … I can't remember in the last 30 years a time when I have been more comfortable and optimistic about investment in the market.''

''In our long-term forecast report … we've got cash rates going up another [two percentage points] over the next three years and housing interest rates above 9% and that may turn out to be moderate.”

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Comment by John on August 3, 2010 at 21:46
In some areas its higher than others. In Victoria for instance, average house prices in 2009 rose by nearly 20%.

Truth is, with an oversupply of demand and an undersupply of affordable housing in most areas it will go up across the board I think.
Comment by Cam on August 3, 2010 at 21:37
I think the issue is that the city real estate is going up & up as most people are sticking 2 city areas 4 jobs, but there isn't much demand in the country - fewer jobs & most of the time a commute isn't possible. We came back from Sydney as we felt that property was 2 expensive & was only going 2 get further out of our reach, & yet we own a 3-bed house here - not in London, though, but still in a city! Shame, loved oz & hope that one day we will be able to go back.
Comment by Michael J Kelly on August 3, 2010 at 19:53
Thats 30% in the next THREE years,not 2011. Maybe he has just invested in several residential properties? In the country there are thousands of properties going unsold, month after month. Even the real estate agent said prices were too high. Two months ago a financial expert on tv said, Australia had some of the most over priced real estate in the world. So who do you believe? As usual its anyones guess.

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