Housing market sentiment has weakened across the country in the June quarter, as prices have fallen and rents slowed, according to the NAB Australian Residential Property Survey.
In its quarterly survey of 300 participants, including real estate agents, property owners and developers, NAB found that confidence had been undermined by softer economic growth and the downside risks posed by the economy’s structural adjustment.
According to the survey, national house prices had fallen to 0.1 per cent in the second quarter of this year following a growth of 0.4 per cent in the last quarter.
The forecast was that national house prices would rise by just 1.4 per cent in the next year and 2.4 per cent in the next two years, despite improved affordability and lower interest rates.
“NAB’s own view of Australian house prices is slightly more optimistic than the average survey forecast,” the report said. “NAB sees capital city house prices rising by 3.1 per cent in the year through to June 2014 and by 2.5 per cent in the year through to June 2015.”
With the weaker expectations of house price growth, there was also a weaker sentiment about the property market, with the NAB Residential Property Index falling from 35 points in the last quarter to 15 points.
South Australia and Queensland had the weakest market sentiments at -9 points and +4 points respectively.
Sentiment was the strongest in Western Australia at 42 points, but that was still a drop from 71 in the first quarter of this year. However, the state is expected to remain the leading state at 72 points by the second quarter of 2015.