House prices are tipped to rise by as much as 20 percent over the next three years, according to the findings from QBE Lenders Mortgage Insurance (QBE LMI) Housing Outlook 2010-2012.
According to the figures, Australian properties will grow by about three percent next year, followed by about eight percent rise during both 2011 and 2012, driven by low interest rates and a shortage of affordable housing, coupled with growth in rental rates.
QBE chief executive Ian Graham said for a $500,000 house, the growth will add more than $100,000 in value over the three years.
Adelaide is expected to see the strongest price gains, where prices will increase by as much as 21 percent by 2012.
Meanwhile, prices in Sydney and Melbourne are predicted to increase by over 20 percent and 18 percent respectively.
Darwin properties are expected to grow by 17 percent by 2012, with Brisbane and Hobart expected to record growth of 15 percent each. Properties in Perth and Canberra will see their value grow by 12 percent.
Graham predicts that as the first home buyers grant eases, upgrades and investor demand is expected to gather momentum and take over as the main drivers of the housing cycle.
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