Sentiment in the Australian housing market is now at a three-year high despite warnings about housing affordability and speculation of a bubble.
National Australia Bank’s (NAB’s) Residential Property Index – which surveyed around 250 property professionals – rose from +16 to +31 from the fourth quarter of 2016 to the first quarter this year, supported by positive expectations for house price growth.
“The latest results paint a picture of a very resilient market and came despite ongoing concerns about housing affordability, supply, the labour market, persistent warnings of a correction and speculation of more official measures to reign in lending to housing,” said NAB group chief economist Alan Oster
Market sentiment in NSW and Victoria surged to record high levels of +58 for the quarter. There were also encouraging gains in other states, Oster said.
“Large gains were reported in SA/NT (+42) along with modest gains in Queensland (+13). Sentiment is still negative in WA (-43) but has improved appreciably from survey low levels reported in the last survey.”
Overall confidence levels have also increased with NAB’s Index expected to rise to +38 in the next year (from +30 in the last Index) and to +40 in two years’ time (from +33).
“Confidence improved most in the under-performing markets of Queensland and SA/NT. NSW and Victoria also remain very upbeat, but WA continues to languish.”
The surveyed property experts anticipate national prices to grow 1.8% over the next year (from 1.2% last quarter) and 2.0% in two years’ time (from 1.3%).
“Expectations have been revised up in all states except WA (unchanged), with Queensland and SA/NT expected to out-perform.”
The survey also suggests that the proportion of foreign buyers in the Australian housing market remained largely unchanged with new and established housing in the March quarter.
In all, foreign buyers accounted for an estimated 10.8% of all new property sales nationally – marginally down from 10.9% in the fourth quarter last year – and 7.2% of all established sales – again down from 7.6%.
“But property experts observed a noticeable decline in foreign buyers of new property in Victoria to around 14% from over 19% in final quarter of 2016,” Oster said.
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