Australia's housing market appears to have regained the confidence of property experts and market watchers, according to a recent poll by the National Australian Bank (NAB).
The NAB Residential Property Index moved back into positive territory for the first time since mid-2018, with property professionals expecting house prices to record a significant growth by the end of the year.
House prices to rise
Housing market sentiment during the third quarter of the year was positive in all states except Western Australia.
Victoria and New South Wales are expected to lead the increase in prices over the next two years.
"This marks a sharp reversal from the previous survey where Victoria and NSW were expected to be the weakest states for price growth and the only states where prices were tipped to fall," NAB chief economist Alan Oster said.
According to NAB's forecast, house prices in Sydney and Melbourne are poised to register respective gains of 1.8% and 0.7%.
There is also an expectation of moderate growth across the capital cities at 4.5% in 2020.
Activity poised to fall?
However, Collins said that despite the stabilisation in prices, the activity side of the market will remain weak. Furthermore, dwelling investment is projected to decline relatively sharply over the next few quarters.
"While the pipeline of work to be done remains high, it is likely this will be quickly eroded with high rates of work done. Building approvals have continued to trend down, suggesting little replenishment to the flow of new work," he said.
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In an environment of stabilising house prices, the low interest-rate environment and easing lending rules could boost the number of investors in new and established housing markets, Collins said.
"That said, tight credit was again called out as the single biggest constraint on new housing development, and access to credit the biggest impediment for buyers of existing property across the country," he said.