According to the latest NAB Residential Property Survey for Q3 2015
, the housing market has started to slow down as property prices and rents start to drop across most states. Nationally, house prices are expected to slow down to 1.5% over the next 12 months.
In spite of this Queensland is the only state to see growth and it is expected to take the place of NSW and lead the country for both price and rental growth in the next 1-2 years (2.6%). NAB expects house price growth in Sydney and Melbourne to slow down in 2016, fall in Perth and rise in both Brisbane and Adelaide.
Capital growth is also expected to outpace rents across all states; however looking forward, rental growth is expected to improve with QLD showing the best amount of growth, although lower returns are forecast for both VIC and NSW.
During Q3, foreign buyers were also more active in both new (15.7%) and established (9%) housing markets and they are most active in Victoria compared to other states in Australia. During Q3 foreign buyers accounted for 19% of new apartment sales, 14.9% of new house, 11.3% of established apartment and 9.5% of established house sales. In terms of new apartments, foreign buyers accounted for almost 1 in 5 new apartments sold, compared to approximately 1 in 10 established apartments and houses.
It is interesting to note that in NSW especially, more foreign buyers purchased higher priced properties; however this is most likely because of the continued house price growth against the weaker Aussie dollar.
One thing to watch out for is the tightening of credit which is the biggest constraint for new housing development; however employment security is also a big impediment to buying existing property.
First home buyers (owner occupiers and investors) are also more active in established markets in all states besides QLD FHB investors.
For full analysis, please download the full report:
NAB Quarterly Australian Residential Property Survey Q3 2015