Victoria house prices 'likely to stagnate'

Home loans applicants considering purchasing a property in Victoria in the coming years may be interested to learn that two experts have forecast that prices are likely to remain stagnant.

Grattan Institute programme director Saul Eslake and AMP Capital chief economist Shane Oliver told the Sunday Herald Sun that prices are unlikely to alter significantly any time soon.

"For anything to happen there needs to be a spark and that can only happen from a big fall in interest rates, a big drop in house prices or a big surge in incomes and I can't see any of that happening in the short term," Mr Eslake stated.

He noted that prices are likely to remain at their current level, which may tempt those with home loans waiting for a drop in the cost of housing to take the plunge and purchase an abode.

Mr Oliver echoed Mr Eslake's opinion, saying that it could be ten years before incomes catch up with house prices.

This comes after figures from the Building Commission revealed that there has been a surge in the value of permits given to firms looking to build high-rise apartments in Victoria.

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