Leading mortgage insurer QBE has forecast price rises as high as 20% in our major cities, boosted by reduced supply at a time of rising demand.

In its Australian Housing Outlook 2019-2022 report, QBE predicts house price growth across all capital cities.

Brisbane is set to experience the sharpest rise in house prices (20%) over the three years to 2022, followed by Adelaide (13%), Darwin (7%), Canberra (6%), Perth (6%), Sydney (6%), Melbourne (5%) and Hobart (4%).

Unit price growth has also been projected in all capital cities except Sydney, where unit prices are expected to drop marginally over three years.

Unit values are projected to rise the most in Darwin (9%), followed by Canberra (7%), Perth (5%), Adelaide (5%), Melbourne (4%), Brisbane (3%) and Hobart (3%).

QBE Lenders’ Mortgage Insurance CEO Phil White says the growth will come in response to a supply and demand “imbalance”.

“As well as lower interest rates, government incentives and an easing of lending restrictions, our report suggests that a drop-off in construction completions is likely to drive prices higher over the next few years,” he says.

“Building approvals fell 19% in 2018-19 and completions are forecast to fall to 163,500 dwellings by 2020-21 – down 22% from the average over the past five years.