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There are three major outtakes from the first quarterly property survey report from NAB for 2018.
Well, for starters, let’s address the four major outtakes:
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.
Another key finding of the survey was that the market share of first home buyers has climbed to a new survey high. This is mostly due to “recent efforts by state governments to improve housing affordability is helping first home buyers, especially in Victoria and NSW,” according to NAB Chief Economist Alan Oster. He also commented that the market share of resident investors has hit a new low, due to how “the APRA inspired crackdown in investor lending is hurting investors.”
Surprisingly, there was a small increase in the share of foreign buyers in new property markets after having fallen to a 6-year low in the previous quarter. This was led by New South Wales and Western Australia.
“Property experts also continue to tell us that credit access is still the biggest constraint on new housing development in the country and the biggest impediment for buyers of existing property” Mr Oster said.
But concerns over interest rates are growing.
“We’re not surprised given NAB’s own view is that interest rates will start rising gradually from late-2018, albeit with the risk this could be delayed until 2019” said Mr Oster.
Apartment forecasts are also broadly unchanged (-0.8% in 2018 & -1.8% in 2019) reflecting large stock additions and softer outlook for foreign demand. For 2019, weakness will likely be concentrated on the Eastern seaboard – with apartment prices expected to fall in Sydney, Melbourne and Brisbane.
“Naturally, any additional changes to government or prudential policy to address affordability or financial stability concerns are likely to have an impact on these forecasts” said Mr Oster.