Prices can still go up in Sydney and Melbourne in 2018: SQM's Louis Christopher

Prices can still go up in Sydney and Melbourne in 2018: SQM's Louis Christopher
Prices can still go up in Sydney and Melbourne in 2018: SQM's Louis Christopher

Sydney house prices stand a good chance of posting growth in 2018, property research group SQM Research managing director Louis Christopher anticipates.

Christopher told the firm's annual conference in Sydney he was sticking to his forecast of a 4 percent to 8 per cent rise for Sydney and 7 percent to 12 per cent growth for Melbourne.

"APRA will loosen the market again because they are under instruction not to crash the market," Christopher said, according to The Australian Financial Review.

"We think APRA will lift the credit growth limit limit, if that does occur, we think it will stimulate the investor market."
 
"What the banks are doing is they have been lowering interest rates for property investment...the gap between owner-occupier and investor loans has now narrowed."
 
SQM suggest in a worse case scenario - should investors not return - Sydney's house prices would fall only by about 1 per cent, buoyed by steady population growth.

"I think the reality would be that the first quarter will be line-balled whether prices in Sydney and Melbourne have fallen or not.

"If they fall, it won't be more than 1 per cent," Mr Christopher said.

"It's very hard to be bearish when you see strong population growth and low unemployment, unless we see a major credit default occur."

Melbourne has a greater chance of a more severe downturn than Sydney, if a large correction happens.

"In absolute dollars, Melbourne is cheaper than Sydney, but compared to incomes Melbourne is more expensive and more susceptible to a downturn," Mr Christopher said.

 

Tags: 
Sqm Research Price Correction

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