Australia’s housing market is predicted to remain soft over the next year, with a NAB survey predicting a decline in house prices of 0.7 percent.
NAB’s Residential Property Index fell in the June quarter, dropping to -11 from +5 in the first quarter, weighed down by weaker conditions in Victoria and NSW.
The survey polled around 300 real estate agents and property managers, property developers, asset and fund managers, and owners/investors.
Victoria (-43), SA (-15) and the NT (-15) posted the lowest scores on the index, while WA (+34) and Queensland (+2) are the only states in positive territory.
NSW slumped dramatically over the period, from +28 in the previous quarter to -13 by the end of June 2012. Victoria’s index score moved further in the red, from -16 to -43.
Key findings of the report include:
National house prices fell by 2 percent in the June quarter, with the biggest falls in Victoria (2.9 percent) and NSW (2.3 percent). They are expected to fall by 0.7 percent nationally over the next year, but grow by 1 percent over the next two years
Average national rent growth slowed to 0.4 percent in the June quarter, down from 1.1 percent in the first quarter of the year. The long term outlook is for softer rents in all states over the next two years, except for WA
Respondents indicated tight credit conditions and housing affordability are the most significant constraints on new housing development. Employment security is now viewed as the biggest impediment to purchasing existing property, especially in Victoria and Queensland
Capital growth expectations are strongest in the sub-$500,000 price range, while the outlook for properties worth more than $2 million remains poor