NAB’s View of Residential House Prices – Brisbane & Sydney to outperform

Dr AndrewWashington Green Property

Hi Everyone,

I thought the interview with John Edwards from Residex is worth looking at to get a bit of an overview of the Australian market, and he thinks that Sydney and Melbourne may have peaked for this cycle, However, if we look at the NAB’s view, we can see that they predict quite robust rises for most regions.

I think it is simply common sense to focus on the two states with the most diversified economies, which are Queensland and NSW, when selecting an area for property investment, unless you have no choice due personal reasons which may restrict your selection capability. Too often we see individuals making potentially incorrect strategic decisions based solely on an emotional bias due to wanting to invest in the same location that they live in.

ANZ chief economist Warren Hogan told the Committee of Economic Development of Australia that the “housing market is at the early stages of a solid cyclical upswing” fed by low-interest rates and market shortfalls.

“We expect a 15-20 per cent lift in home prices between 2013 and 2015,” he said with long-awaited rises already underway in Sydney and Melbourne” ANZ one of the country’s biggest banks expects house prices to rise as much as 20 per cent before the end of next year, with lifts predicted to begin soon in parts of Queensland.

NAB modelling indicates that average capital city house prices will rise by around 6% through the year to December 2014 and by 5% in the year to December 2015, which is more bullish than the average survey forecast. House price growth should be supported by continued low-interest rates, improved affordability, population growth, long-standing supply issues and foreign buying activity.

However, unemployment pressures and the economy are likely to put a ceiling on how high house prices will go.

Brisbane (6.4%), Perth (6.3%) and Sydney (6%) lead the way forward in 2014, with much slower growth predicted in Adelaide (2.1%) due to high unemployment and an under-performing state economy. State variance will persist through 2015, with Brisbane (6%) and Sydney (5.1%) out-performing the national average. Modest price growth is also forecast for Perth (4.6%) and Melbourne (3.4%), but Adelaide (2.6%) continues to under-perform.



Dwelling values continue upward trend

All capital cities posted a month-on-month increase in dwelling values in March, with Brisbane the market to watch, new research has revealed.

Dwelling values rose by 2.4% over March, equating to a 3.5% capital gain over Q1 according to the RP Data-Rismark Home Value Index.

Over the past three months, all capital cities apart from Perth posted a rise in dwelling values. Melbourne led the charge, up 5.4% over the quarter, followed by Hobart (up 4.7%) and Sydney (up 4.4%).

Sydney’s housing market has recorded record high dwelling values and is now 15.8% higher than its previous peak, says RP Data research director Tim Lawless. This compares to Melbourne’s growth of 4.7% from its previous peak, Perth’s growth of 2.9% and Canberra’s growth of 1.2%. read more...

Capital city property supply levels tighten 

james- Switzer brokerBy Craig James
Judging by the low supply of stock on capital city housing markets, home prices are likely to remain firm for some time.RP Data arguably has the best information on housing supply, claiming 100 per cent coverage of listings. RP Data says that it “tracks listing numbers nationally via real estate portals and print media as well as sourcing listings data directly from many of the major real estate groups. read more...
johnedwards-20140403_original.png?1396571321 By John Edwards
Is the housing bubble a myth or reality? For his views on house prices, John Edwards from Residex joins Broker TV.  Watch it now 

 Brisbane inner north

Outstanding price growth for Brisbane’s inner north

Apartments in Brisbane’s inner-northern suburbs have been consistently achieving double-digit annual growth since around 2008, according to a local real estate group.

Director of Position Property Richard Lawrence said information from RP Data shows Albion, Clayfield, Ascot and Hamilton had annual price growth of 16 per cent over the past six years.

“Whether it is owners or investors, these figures represent not only market growth in the region but continued confidence in the inner-north suburbs,” Mr Lawrence said. read more …