’s latest Quarterly Australian residential property survey for December 2014 indicates the property types catching the eye of foreign investors and why house prices are falling.
NAB Group Chief Economist Alan Oster
says NSW has replaced Queensland as the strongest state in the December quarter, with Queensland and Victoria most optimistic for the future in contrast to WA at the other end of the spectrum.
“We are forecasting average house price growth of around 4% over the year to end-2015 and two per cent over the year to end-2016," Mr Oster said.
Foreign buyers are less active across the country, except in Victoria where they account for a third of all new property sales.
Foreigners are mostly targeting properties under one million dollars with over half of purchases consisting of apartments, one-third houses and the remainder in re-development.
“Foreign buyers accounted for 14.8% of total demand for new property in Q4, down from 16.8% in Q3. In Victoria, however, they accounted for a new high of 32.5% of total demand,” said Mr Oster.
Housing affordability, construction costs and a lack of development sites were the major causes holding back new housing developments, while employment security and price levels were significant deterrents for buying an existing home.
The survey also shows that first home buyers looking to invest account for eight per cent of total new property demand and over nine per cent in existing property markets.
“This suggests that affordability constraints or potential capital gains are encouraging some first home buyers to delay moving in to their first homes,” said Mr Oster.