There are three major outtakes from the first quarterly property survey report from NAB for 2018.
- NAB has lowered its house price forecast for 2018 on a softer Melbourne market and on continuing weakness in Sydney
- Confidence improved sharply in Western Australia, but fell further in New South Wales as bigger price falls are expected
- The NAB Residential Property Index rose 3 points to +23 (above the long-term average of +14)
What does this even mean, though?
Well, for starters, let’s address the four major outtakes:
- A fall in the house price forecast is good for buyers, but bad for sellers. Given that a -0.8% fall in house prices is expected overall, this isn’t too bad, but individual markets differ. The softer Melbourne market is expected to rise 0.1%, whilst the Sydney market falls 3.4%. And no one expects this to improve; consumer concerns over the costs of living and high levels of household debt are keeping people wary. For 2019, the house price forecasts remain broadly unchanged at +0.8% with only Sydney expected to fall (albeit modestly).
- Overall, confidence levels – which are a measure of how confident people are in the market – have remained mostly unchanged. Western Australia has had a strengthening, and New South Wales had a softening.
- The increase in the Residential Property Index masks a shift in sentiment across states. In Victoria, South Australia, the Northern Territory and New South Wales, it was driven down, but the increase in sentiment in Western Australia helped offset this. The continuing strengthening of the Queensland sentiment also helped.
Now that we’ve covered this, let’s check out everything else:
Something else to note in this regard is that survey house price expectations are mirroring these trends. Property experts are predicting bigger house price falls in NSW and have scaled back their outlook for Victoria. In Queensland and Western Australia, however, stronger growth is expected.