Sydney property slump set to continue

A prominent Australian housing industry forecaster says the Sydney market is facing another two years of declining property prices.

By contrast, BiS Shrapnel expects modest improvements over the next three years in regional NSW as well as in Brisbane and regional Queensland.

In its latest publication of Residential Property Prospects, BiS Shrapnel says housing affordability will remain a major constraint on residential property markets.

It says Sydney currently remains the most expensive Australian capital and will significantly lag the national recovery.

BiS Shrapnel says the turnaround in Sydney will not start until 2008-09.

Median house prices in Victoria are also expected to improve but in Perth, where there has been strong recent growth, prices are expected to fall back into line with other capitals.

In 2005, Perth and Darwin were the two capitals where there were strong price rises.

Property prices in South Australia are expected to be minimal over the next three years.

- RADIO AUSTRALIA