NAB has just released its quarterly property survey for Q1 2014. It rose to a new high of 37 in the March quarter, with South Australia and the Northern territory offsetting falls in Victoria and Western Australia.
Interestingly though, given the apparent competition in banking in this slow credit growth environment, NAB economist Alan Oster said credit availability was “still being identified as the biggest impediment” to buying a house.
But that hasn’t stopped Australians continuing to be bullish on property prices over the next year or so.
Understandably at this time in the RBA’s interest rate cycle, rate rises are also a concern. But interestingly Australians are still worried about the jobs markets. Oster said:
In the established housing market, employment security continues to be seen as the biggest impediment to buying property in most states.
While the property market will obviously benefit if the recent uptick in employment can take hold, leading to better job security, so will the economy more broadly.
Turning to the dynamics driving the markets, NAB notes foreign buyers make up a very significant other, in terms of demand in Australia at the moment.
Oster notes that “foreign buyers now account for 13.9% of total new property and 9.5% of existing property demand.”
Summing it all up: Oster says average capital city growth should be 7.7% across the course of 2014 with the gains limited by concerns about unemployment and the economy.