This week’s biggest property related story was probably BIS Shrapnel’s release

of their three year forecasts for property prices. Within the release they forecast

  that capital city price growth over the next three years would range from 11%

in Darwin to 19% in Sydney, Melbourne and Adelaide. Their forecasts have come

in for much criticism however the forecasts reported by the media did not take

into consideration the fact that these figures include inflation.

Although many have suggested these forecasts are quite bullish, in real terms

we are talking about increases of between 5% and 9%. The media headlines

also don’t mention when in that three year period the growth will happen. I

don’t think anyone would believe the next year to year and a half will see strong

price growth given the economic climate but given the undersupply of dwellings

in Australia and the cyclical nature of our market it may be the case that property

prices will rebound in the second half of the three year period.

Dwelling commencements data was also released during this week with the

statistics showing that the trend estimate dwelling commencements for the

March 2009 quarter fell by 8.5, following an 8.4% fall in the previous quarter.

Many economic commentators as well as Government Departments have

highlighted Australia’s ongoing shortage of housing estimated to be somewhere

between 40,000 and 80,000 too few dwellings. In order to cater for our

booming population it is imperative that dwelling commencements improve

to provide housing for those in need and to minimise affordability issues

that arise due to this shortage. Given this result it is unsurprising to see

Government incentives for purchases of new houses however, it may be

more effective to slash the restrictive charges on new development and

inject money into the timely deployment of critical infrastructure in and

around these new housing areas on the outskirts of our capital cities.

Locally there is a great need for more stock. There are few homes available

under $300,000 and some agents are starting to get up to old tricks.

Poaching listings from other agents is one tactic that some agents employ.

Although illegal, it doesn't stop some of the unscrupulous agents doing it

anyway. The problem with the governing Act is it is not enforced. many

consumers are unaware of their rights, and the Department enforcing

the law is a toothless tiger.