Australian buyers’ appetite for property is starting to ease after a record year in the market for price growth, construction and low interest rates.
A survey of property experts by NAB found that although sentiment dipped from 71 to 60 points in the past quarter, the market was still in positive territory compared to 2019 levels.
House prices have started to slow, in line with sales and building approvals, “pointing to a market that has passed its peak”.
Construction costs and a lack of established property supply were seen as the biggest issues, while a drop in yield would impact investors.
From this, NAB reviewed its forecasting for dwelling price growth for next year to 4.9 per cent while Westpac tipped growth at 8 per cent.
NAB national housing market sentiment
NAB economists said the market had held up remarkably well despite disruptions to the economy, with strong support from policy makers and little labour market fallout.
“Overall, that sees a very strong print for house prices in 2021 but a sharp slowing in 2022 as the impact of lower interest rates fades and affordability constraints begin to bind,” the report stated.
“Our outlook is generally similar across states but the relative performance in the year to date sees Sydney and Hobart print very strong outcomes, with Melbourne and Perth seeing softer, but still strong, outcomes.”
Another consumer sentiment survey of 30,230 respondents by Finder revealed 35 per cent of people thought it was a good time to buy property.
Finder head of consumer research Graham Cooke said this was the lowest level since the survey began 2.5 years ago.
“Extended lockdowns and border closures have done little to curb price growth this year,” Cooke said.
“Rock-bottom interest rates and the property boom instilled a fear of missing out among prospective home buyers.
“As we emerge from those lockdowns, a record number of Australians are now pessimistic that now is the time to buy.”
The Reserve Bank of Australia is keeping a close eye on excessive borrowing which could lead to vulnerabilities in the market.
Meanwhile the Australian Prudential Regulation Authority has moved to tighten lending standards.
Article Source: www.theurbandeveloper.com