The Western Australia (WA) market was foreseen to be one of the best performers in the country within the next two years, although it could be at the risk of higher interest rate and stricter lending regulations.

National Australia Bank (NAB) on Thursday said that, along with Queensland, WA would most likely spearhead the country’s capital growth in the next two years.

“Queensland is expected to lead the country for capital growth in the next 12 months, although expectations were pared back to 0.7% (2.0% in Q1 2018). WA is next best at 0.6% (1.3% in Q1 2018), followed by SA/NT (0.3% vs. 1.8% in Q1 2018),” NAB disclosed.

WA had been the worst performing market across the nation over the last three years after the end of the mining construction boom and a drastic slowdown in population growth. However, tighter lending standards and a surge in supply, particularly in Sydney, led to prices falling nationally, according to Perth Now.

Within the next two years, house prices in WA are expected to improve by almost 2%— the highest of any capital city.

Further, WA rental market was projected to tighten, after the worst performance for landlords in more than twenty years.

Experts anticipated a 0.1 % increase in rents this year and a 1.1% increase in 2019. So far, rents have fallen close to 20% since late 2014.

Meanwhile, prices were expected to drop 2.1% in New South Wales this year and 1.8% in 2019.

NAB chief economist Alan Oster warned that the market could weaken, especially if regulators tightened lending standards.

“Any further tightening in lending standards or additional changes to government or prudential policy to address affordability or financial stability concerns are likely to have an impact on these forecasts,” he said.


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