The recent NAB Quarterly Australian Residential Property Survey found that positive outlooks in NSW and Victoria are continuing to offset weaker expectations in other states.
NAB Group chief economist Alan Oster said: “Overall sentiment improved in Victoria and remained solid in NSW, but fell in all other states and quite heavily in South Australia and Western Australia, with both states printing their weakest index result since the survey began.”
According to the report, national house price growth over the next one to two years is expected at 2.1 per cent to 2.3 per cent.
However, through to the end of calendar 2015, average national house price growth is forecast at 6.1 per cent.
Capital growth will be led by Sydney at 10.2 per cent and Melbourne at 6.5 per cent – Brisbane and Adelaide will see gains of 4 per cent and 0.9 per cent while prices will fall -3.8 per cent in Perth.
“The survey also suggests that faster capital growth will push yields lower as rental growth continues to slow over the next one to two years,” Mr Oster said.
As a result, the NAB Residential Property Index fell -4 to +17 points in the June quarter as a slowdown in rents offset counterbalanced continued capital growth.
While Sydney and Melbourne are expected to record strong growth in 2015, NAB forecasts that price growth in the capitals will slow in 2016, to 3.9 per cent and 3.1 per cent respectively.
Mr Oster also pointed out that foreign buyers were less active in new property markets in Q2, with their share of total demand falling to 12.8 per cent.
In existing markets, however, foreign buyers’ demand increased from 7.5 per cent in Q1 to 8.6 per cent.
“It was however notable that foreign buyers had a much bigger presence in the established housing market in Victoria, with a market share of just over 16 per cent,” Mr Oster said. “This was much higher than in all other states.
“Interestingly, the survey also reported a much higher share of foreigners buying dwellings or land (23 per cent) for redevelopment in Victoria.”
