NAB slashes growth forecasts for houses, units

Font size :



National Australia Bank (NAB), the nation’s fourth largest mortgage lender, has slashed its growth forecasts for both houses and units this year due to sharply deteriorating sentiment about the property market.

NAB’s second quarter Australian Residential Property Survey adds to a growing sense that tighter credit rules and a growing supply of new stock, particularly apartments, have reined in Australia’s seemingly unstoppable housing market boom

Last Thursday, NAB reduced its forecast for house price growth this year to 5%, from 7.2%. The bank also halved its expectations for units to 3%, from 6.8% three months prior. 

“Falling confidence reflects weaker expectations for both house prices and rents,” said Alan Oster, NAB’s group chief economist. “Property experts lowered their expectations in all states, except WA, with the biggest cutbacks in Victoria and to a lesser extent in Queensland and NSW.”

Next year, detached houses will gain 4.3%, while units will decline by 0.3%, NAB predicted. 

The retreat of local investors in the June quarter was one factor that contributed to the growing weakness, even as first-home buyer activity picked up. “Clearly, tougher measures on banks announced by regulators to rein in investor lending are being felt in this segment of the market,” Oster said.

In contrast, foreign investors gathered steam, accounting for 11.6% of new property purchases, from 10.8% in the March quarter. In Victoria, foreign buyers bounced back to nearly 21% of all new sales, from just under 14% in March. This figure was just under 20% in the December quarter. 

“Foreign buyers continued to play a role in Australian housing markets in the June quarter despite China’s crackdown on capital outflows into overseas property and a raft of new restrictions and taxes on foreign ownership introduced in the 2017/18 federal budget,” Oster said.
 

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Wednesday, Sep 20, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords