QUEENSLAND is leading the nation when it comes to confidence in residential property, with the industry expecting house prices to grow the fastest in the sunshine state over the next two years.
The NAB Residential Property Index has fallen to its lowest level in seven years, with Queensland the only state to report a positive result in the third quarter of 2018.
Sentiment fell 15 index points to -9 — dragged lower by big falls in New South Wales and Victoria, where the bank tips house prices to decline even more than previously expected.
The survey of more than 300 property professionals reveals sentiment in Queensland improved by 7 index points during the quarter to a read of +21.
Those surveyed expect Queensland to lead the country for house price growth in the next 12 months, with prices increasing by 0.8 per cent.
Longer term, house prices are tipped to rise 1.4 per cent in the next two years.
Property professionals also see Queensland leading the way when it comes to rental growth, with rents expected to grow by 1.6 per cent in the next 12 months.
NAB expects the correction in house prices nationally to continue for another 18 to 24 months, with Sydney falling around 10 per cent peak to trough and Melbourne 8 per cent.
NAB chief economist Alan Oster said he was “surprised somewhat” by how positive the industry was about Queensland, given the negativity in other states.
“I won’t say it defies gravity, but it’s not a bad result in terms of the survey,” Mr Oster said.
“We expect Brisbane house prices to remain flat over this year and next.
“Brisbane has had an annualised growth rate of about half a per cent for a while now and that’s not bad.”
Mr Oster said the bank was surprised at how resilient the Brisbane unit market had been in the face of oversupply.
“It’s nowhere near as bad as what we expected,” he said.
It comes as a competing survey paints a different view.
The latest ANZ-Property Council survey found confidence in Queensland’s property sector has fallen to its lowest level in more than a year, despite house prices continuing to rise.
Statewide confidence in the sunshine state has fallen from 140 index points in July to 128 points this quarter.
The last time it was that low was in September 2017.
For the first time in four years, all states recorded a significant drop in industry confidence, with overall national confidence declining by 12 index points this quarter.
The survey of more than 1000 property industry professionals reveals Queenslanders are more disappointed about the performance of their state government when it comes to planning and managing growth than any other state or territory.
Property Council Queensland executive director Chris Mountford said the fall in sentiment could be attributed to concerns over increasing interest rates and tighter lending restrictions nationally.
“As concerns over the cost and availability of finance persist, it is important to remember Queensland is not immune to these wider issues,” Mr Mountford said.
“Now, more than ever, it is essential for the government to step up and support the property industry.”
Debt finance availability has also recorded a decline in sentiment across the board, with Queensland dropping to -23 index points.
“In Queensland, the industry has experienced a period of change and uncertainty over the previous 12 months, with increases to land tax and a more than doubling of Additional Foreign Acquirer Duty (AFAD),” Mr Mountford said.
“The dramatic tax increases imposed on an industry that already pays 53.7 per cent of Queensland taxes is certainly a factor holding back stronger gains in sentiment.
“It is imperative that the (state) government supports the sector in the face of more challenging market conditions.”
