Property prices in Melbourne are expected to fall by more than ten per cent by 2017 - due to over-building.
According to theaustralian.com.au, BIS Shrapnel managing director, Robert Mellor, predicts that apartments in the central business district, Docklands and Southbank areas of Melbourne can expect to see their prices decline by over ten per cent.
He says this is thanks to over-building in these areas. Since 2010 Melbourne has started over 20,000 building projects, when demand only requires 12,000.
This over-building will lead to a huge surplus of apartments, BIS Shrapnel predicts. By 2016 it is expected that Melbourne will have a surplus of 28,000 places to live and 10,000 unwanted apartments.
However it isn't all bad news, as BIS Shrapnel also said house prices in Sydney will see a 19 per cent rise over the next three years, reports smh.com.au.
The average house price in Sydney is currently $690,000 - but the rise could mean the average price could soar to $820,000 by June 2016.
Mr Mellor said that despite the rise, property prices in almost all of Australia's capital cities were at their most affordable since the early 2000s.
"While first home buyer demand remains below long-term levels, upgrader demand is trending upwards and investor demand is accelerating as investors take advantage of improved [rental] yields, lower interest rates and the return of price growth," he said.