National house prices fell by 0.6% in the 4th quarter of 2012, with prices falling in all states except Western Australia, which grew by
0.4%. Victoria had the biggest fall in prices (-0.9%).
NAB’s modelling indicates that average house prices will grow by around 1.5% by year end and by 3% by the end of 2014.
Rents rose nationally by 0.4%, growing fastest in WA (1.9%), but fell in SA/NT (-1.4%) and Vic (-0.2%). Rents are expected to grow by 2% nationally in the next year and 3.1% in the next 2 years.
Owner occupiers were the biggest players in new property market but first home buyers also more active, particularly in WA. Overseas buyers also prevalent with Chinese buyers reportedly fastest growing segment of this market.
Demand for all new property types improved in Q4’12 but still assessed as only “fair”. Demand for most property types expected to strengthen in the next 12 months led by inner city.
Survey respondents cited tight credit conditions as the most “significant” constraint for new housingdevelopment. Concerns over housing affordability are falling slowly as interest rates fall but are still “significant”.
Demand for existing property was weaker in all locations and all property types in 4th quarter of 2012. Property professionals see“good” capital growth prospects in the sub-$500,000 market next year. Outlook for premium properties is still “poor”.
With the domestic economy presently in a soft patch and the labour market weakening, employment security has entrenched as the biggest impediment to purchasing existing property in all states. Access to credit is also seen as a “significant” impediment to purchasing existing property.
