Brisbane’s median house price is predicted to jump 20 per cent by 2022, far beyond any other capital city in the same period.
The BIS Oxford Economics property forecast predicts Brisbane will see the greatest national gains in house prices, but not for another couple of years as the remaining oversupply is consumed.
The median house price is expected to increase from $552,000 to $665,000 in Brisbane.
That percentage rise is the highest predicted for the capital cities nationally, well ahead of Sydney at 6 per cent and Melbourne at 7 per cent.
“A weak Queensland economy and high level of dwelling supply have dampened price growth in Brisbane in recent years,” the report notes.
“The result is that house prices in Brisbane are relatively affordable.
“With credit conditions easing and interest rates falling, improving affordability will be a catalyst for raising price growth as stronger economic growth returns and the market moves into a rising deficiency.”
Apartment supply is still high, according to the report, and the economy remains slow keeping price rises “modest” over the next 12 months before prices are predicted to jump in 2021-22.
While houses are predicted to see a big jump, apartment and unit prices are only expected to see a 14 per cent median rise in Brisbane.
The expected top performing suburbs are Red Hill, Keperra, Mount Gravatt, Arana Hills and Rochedale South topping the list.
It means Brisbane, where there is already 18 suburbs with a median house price above $1 million, would continue to buck the national property downturn.
The Gold Coast and Sunshine Coast, meanwhile, are benefiting from the high migration rates with house prices remaining high.
With low vacancy rates and supply now increasing, BIS Oxford Economics predicted slower price growth of nine per cent for the Gold Coast and seven per cent for the Sunshine Coast to June 2022.
Further north, Townsville’s house prices struggled as mining investment left the region but the city can still expect a 9 per cent house price rise over the coming two years.
Report author Angie Zigomanis said nationally housing supply was high.
“Supply is running at record levels, with new dwelling completions having exceeded 200,000 in each of the past four years and expected to have peaked at a record of just under 227,000 dwellings in 2018-19,” Mr Zigomanis said.
“This compares with underlying demand for new dwellings averaging around 195,000 per annum in the same period, which in itself is a record.”
Mr Zigomanis said reductions in interest rates and lending policies becoming more relaxed were predicted to help stabilise residential markets this year and encourage price growth to start in 2020.