The latest forecast from the National Australian Bank is for house prices to weaken over the next two years. The NAB Residential Property Survey shows the housing market losing steam with price increases of around 1.5 per cent nationally, although an average of 4 per cent in the capital cities. Regionally prices in Victoria will grow the most (2.2 per cent) followed by Queensland (2.1 per cent) and New South Wales (1.5 per cent). In South Australia and the Northern Territories there will be little change while Western Australia is predicted to see a fall in prices of 0.2 per cent. All capital cities are forecast to see increased prices; Brisbane (5.7 per cent), Sydney (4.1 per cent), Melbourne (2.7 per cent), Adelaide (2.1 per cent) and Perth (1.8 per cent). The report expects purchases of new property by foreign buyers to be around 15 per cent, roughly in line with the last two quarters. Apartments continue to be the most popular choice for foreign buyers. The NAB report also shows weakness in the rental market. For investors, rent expectations are for national growth of 0.8 per cent although Queensland and Victoria will fare better.
Selling times fall in capital cities
The time it takes to sell a home in almost all of Australia’s capital cities has fallen according to figures from CoreLogic RP Data. The most recent figures (Oct. 2014) show that the average selling time in Sydney was 51 days for a house and 41 for a unit; Brisbane 66 days for a house, 74 for a unit; Melbourne 66 for a house, 75 for a unit; Perth 58 for a house, 61 for a unit; Adelaide 74 for a house, 80 for a unit; Hobart 85 days for a house, 101 for a unit; and in Darwin 92 days for a house and 100 days for a unit.
More land supply needed in Queensland
Queensland needs more supply of residential land in order to moderate house prices in the face of a growing population. The Property Council of Australia says that the regional planning system will need changes to effectively cope with more residents and to ensure that the infrastructure is in place. Executive director Chris Mountford says: “An under-supply of land has significantly driven up the cost of new housing in Queensland. An expanded urban footprint is needed to assist in meeting current demand, as well as providing for future growth.” He says that the regional plan for south east Queensland has been in place for a decade but has failed to deliver a reliable development blueprint.
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