Quarterly Australian Residential Property Survey – June 2012
NAB’s Quarterly Australian Residential Property Survey focuses on conditions in the Australian residential property market. NAB’s Residential Property Index fell […]
NAB’s Quarterly Australian Residential Property Survey focuses on conditions in the Australian residential property market.
NAB’s Residential Property Index fell in the June quarter, weighed down by weaker conditions in Victoria and NSW. The national housing market is expected to remain soft over the next year with property professionals predicting a -0.7% decline in house prices. There is however wide variance between states, with prices falling in Victoria, NSW andSA/NT, but growing modestly in WA and Queensland. Employment security is now the biggest concern for homebuyers as interest rate concerns recede
- NAB’s Residential Property Index fell to -11 points in June quarter (+5 in Q1’12). WA still the strongest state, but overall conditions now also positive in Queensland. Conditions deteriorated sharply in Victoria and NSW with negative sentiment impacting capital values and rents. WA to out-perform the national average in the next 1-2 years, but Queensland the big improver. Victoria remains the weakest market.
- National house prices fell -2% in June quarter, led by Victoria (-2.9%) and NSW (-2.3%). Capital values held up best in WA (-0.6%), while house price declines slowed in Queensland (-1.7%) and SA/NT (-1.6%). National house prices are expected to fall -0.7% over the next year and grow 1% over the next 2 years. Modest gains are forecast for WA, Queensland and SA/NT. Victoria and NSW the most pessimistic states.
- Average national rents slow to 0.4% in June quarter (1.1% in Q1’12), with rents falling in Victoria and SA/NT. Longer-term outlook for rents softer in all states over the next 1-2 years, except WA. Rental growth expected to be slowest in Victoria.
- First home buyers and resident investors were more active in the new property market in Q2’12. Demand strongest for inner city houses and low rise apartments/townhouses, but overall demand still very soft.
- Tight credit conditions and housing affordability the most “significant” constraints on new housing development. The extent of concern over interest rates falling rapidly as official rates continue being cut.
- Demand for existing property weaker in most locations and for most property types in the June quarter. Houses are still the most preferred type of property, especially in the inner city. Owner-occupiers are still the biggest players in the market. Capital growth expectations are strongest in the sub-$500,000 price range, while the outlook for properties over $2 million remains “poor”.
- Employment security now viewed as the biggest impediment to purchasing existing property, especially in Victoria and Queensland. Access to credit also still a major issue.
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