As economic conditions become more favourable for homeowners, the nation's property market is heading for an upturn, with house values tipped to climb over the next three years.
Sydney, Perth and Brisbane are expected to trump the rest of the nation, with one report forecasting property growth in the three capital cities will lead a recovery in real estate markets.
The LMI Housing Outlook for 2011 to 2014, prepared by BIS Shrapnel, said house prices in Sydney will increase by 16.7 per cent between 2013 and 2015, indicating increasing demand in the city's residential land sector.
The predictions, which will be welcomed by Sydney homeowners, are likely to attract the interest of property investors, with the New South Wales capital remaining one of the strongest and more lucrative property markets in the country.
Median house prices in Sydney are forecast to increase by 2.7 per cent next year, 6.1 per cent in 2014, and 7.1 per cent the year after – the third strongest growth rate of the nation.
Perth is tipped for the largest increase in house prices, with 2013 seeing a 6.3 per cent jump, a 7.9 per cent spike the year after, and a 6.4 per cent increase in 2015 – equating to a 22.1 per cent rise over three years.
Brisbane is expected to be the second strongest market during the same period, with an 18.9 per cent surge in property prices over the three years.
BIS Shrapnel managing director Robert Mellor told the Australian Financial Review that while a property bubble is unlikely, confidence is returning to the sector, particularly in the Perth, Sydney and Brisbane markets.
A return of first time buyers and low interest rates had contributed to improving conditions, as well as increasing migration figures which are driving up demand on the real estate market.