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HOUSE prices in Australia are expected to remain high as a flood of overseas immigrants is set to re-ignite Australia's housing boom as demand outstrips the supply of homes across the country.
Overseas migrants are expected to boost Australia's 19.8 million population by between 140,000 and 150,000 a year over the next three years, according to leading economic forecaster BIS Shrapnel.
There are more long-term visitors arriving in Australia to go house-hunting than previously believed.
This was a factor ignored by the doomsayers who had predicted gloom for the housing industry.
BIS Shrapnel director Robert Mellor said the residential building sector would slide 11 per cent this financial year but it would not be long before the market took off again.
By 2005, there would be big increases in housing demand in Queensland, Victoria and New South Wales.
And more people would knock down their houses to build new ones-to avoid paying astronomical land prices and prohibitive land taxes and stamp duties.
"Demolitions have been running particularly strongly in Sydney, as the high cost of land leads some home owners to knock down their existing homes and build new ones," Mr Mellor said..
For each state, BIS Shrapnel predicted:
* Queensland will need 41,500 new homes each year over the next five years because of a flood of international and interstate migrants.
* New South Wales will have a housing shortage of almost 22,000 homes by June 2004, driving another boom into 2005/2006.
* In Victoria, demand for new houses will rise from 3300 homes a. year to 36,900 a year because of overseas migrants and a large number of demolitions.
* South Australia will have 4300 excess homes by June 2004 because of more people moving out of the state.
* Tasmania will have 1500 too many homes each year for the existing population.
* In the Northern Territory, an increase in oil and gas projects will drive demand for 1600 extra houses a year, although it now has 3000 too many homes.