National Australia Bank’s quarterly index for residential property has been released for the 3 months to the end of June.
The index is based on a survey of around 260 property industry professionals.
After hitting a 3-year high in March, sentiment cooled somewhat in June with the index returning in line with its long-run average.
Despite that, the report also outlined individual markets in each state that are set to outperform over the next 12 months.
Here’s the map:
The forecast suggests that well-known areas in and around Sydney and Melbourne will continue their torrid rate of growth against the backdrop of a broader market easing.
While some suburbs are still expected to out-perform, the average forecast for house price growth across Australia over the next 12 months fell to 0.6% from 1.8% in the previous quarter.
“After multiple years of very strong growth, Australia’s housing market appears to be entering a cooling phase – although evidence points to an orderly adjustment rather than a sharp deterioration,” the bank said.
NAB’s chief economist Alan Oster cited low wage growth, continued supply in apartment construction and restrictions on foreign investment as key factors which would restrict house price growth.
“However there are still a number of positive elements supporting the market, which will likely see an orderly adjustment rather than a sharp correction. Interest rates are still quite low, despite recent increases, and pent-up demand for housing remains quite large in some markets, especially Sydney and Melbourne,” Oster said.
NAB’s Q2 survey showed that the index fell by 17 points in the 3 months to the end of June, which brings it back in line with the long-term average.