Australia: House prices to post growth of 7.2% in 2017 - NAB
NAB Economics is forecasting house price growth of 7.2% (previously 3.4%) in 2017 for Australia, while unit prices are forecast to increase 6.8% (was -0.8%).
Key Quotes
“But the market is expected to cool from late-2017, resulting in more modest growth of 4.3% for detached houses and -0.4% for units in 2018.”
“According to NAB Group Chief Economist Alan Oster “Solid market sentiment in the NAB Survey and better than expected price gains so far this year have prompted us to revise up our 2017 forecasts. But tighter credit and prudential conditions, large additions to the apartment stock and limitations from subdued wages growth and deteriorating affordability should see markets cool into 2018”.”
“By capital city, house price growth is forecast to remain strongest along the eastern seaboard in 2017, consistent with outcomes in the NAB Residential Property Survey and a relatively solid outlook for their local economies.”
“Sydney (10.5%) and Melbourne (10.8%) will both see solid, albeit slightly slower, growth in prices. Brisbane (1.0%), Adelaide (1.9%) and Hobart (6.7%) will cool also, while Perth will remain very weak as house prices decline by another 3.4% - although the pace of decline is expected to ease.”
“These trends will broadly continue into 2018, with growth in Sydney (4.9%) and Melbourne (5.5%) returning to more sustainable levels. Apartment prices are expected to continue their trend of under-performance, relative to detached houses, reflecting the heightened supply concerns in the market.”
“The timing of when new supply will come online and the willingness of potential buyers to shift their preferences towards these types of dwelling, however, adds to the uncertainty around the outlook.”
“Sydney units are forecast to do relatively well, while Perth units are forecast to decline again in 2017 and both Melbourne and Brisbane are expected to dip into negative territory in 2018.”
“About 250 property professionals participated in the Q1 2017 survey.”