KPMG is forecasting a 5 percent increase in Australian property prices before the end of the year. This growth comes after the country’s median property price in capital cities reached a record high of $851,000 in May. KPMG expects a rise of 5.3 percent across capital cities and 4.5 percent across the country by December, with varying growth rates in different markets.
Perth is projected to see the most rapid rise in values at up to 10 percent, while Darwin is expected to have more modest growth under 1.7 percent. Brisbane and Adelaide follow closely behind Perth, with house prices projected to increase by up to 7.9 percent by the end of the year. Sydney and Melbourne, the two most populous cities, are expected to see growth rates of 4.9 percent and 2.8 percent, respectively.
KPMG also anticipates greater growth in Sydney, Melbourne, Canberra, and Darwin in 2025 compared to this year, while the rate of increase will ease in other capital cities. This forecast is based on the prediction that the Reserve Bank of Australia will begin cutting interest rates next year.
Factors contributing to the continued growth in property prices include a lack of housing supply, high construction labor costs, and high rental prices. Domain’s Forecast Report expects growth of up to 6 percent for houses and 4 percent for units by the end of the 2024-25 financial year.
Despite expectations of interest rate cuts, Phil O’Donoghue, the chief economist of Deutsche Bank, predicts that the RBA will resume hiking the cash rate in August. He cites high underlying inflation in Australia as a key factor in this prediction.
Overall, the Australian property market is expected to see solid price gains over the next 18 months, with varying growth rates across different cities and factors influencing the market dynamics. Please rewrite this sentence.
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