Property prices are slowing down across the country, and a couple of surveys already predict a fall in house prices over the next three years. According to analysts, there are several reasons why the housing market’s growth is approaching its end.
One is declining confidence among property professionals, as shown in the latest ANZ/Property Council survey. The only states bucking the confidence decline trend were South Australia and Victoria.
Oversupply is also just around the corner. Research house BIS Shrapnel forecasts an extra 24,039 homes above what are needed by 2017, leaving the country oversupplied for the first time in more than a decade. NSW is the lone state where a shortage is expected.
Rents are also starting to ease in most capital cities, especially over the three months to June 2016. Only Canberra and Sydney saw an apartment rent increase by 1.3 and per cent, respectively. With an expected supply glut, rental declines may continue as well.
Furthermore, the latest data from the Australian Bureau of Statistics show that property prices are already softening in many capital cities. The average residential dwelling price dropped 0.2 per cent across all cities.
Finally, fewer people think now is a good time to buy a dwelling, as evidenced by the results of Westpac-Melbourne Institute Survey’s of Consumer Sentiment report known as the Time to Buy a Dwelling Index.
“The index has been markedly weaker since the middle of last year although there has been no sign of further deterioration in 2016,” said Westpac chief economist Bill Evans.