Date: July 12 2012
Australian house prices fell 2 per cent in the June quarter with more falls expected in the coming year, especially in the most populous states of New South Wales and Victoria, according to National Australia Bank.
‘‘Employment security is now the biggest concern for homebuyers as interest rate concerns recede,’’ the report says. The comment comes as the economy shed 27,300 jobs in June, the biggest monthly drop in 2012.
NSW and Victoria have already posted the steepest declines in house prices for the April-June period, showing 2.3 per cent and 2.9 per cent drops, respectively, according to NAB's residential property survey, released today.
The mining states held up better, with Western Australia's house prices edging 0.6 per cent lower and Queensland's 1.7 per cent, the report found.
The survey involved about 300 real estate professionals, such as agents.
Respondents to the NAB survey don't expect the property market to revive soon. They tip national house prices will be 1.5 per cent lower by the end of 2012 compared with June 30.
For the year to June 2013, though, the loss will moderate 0.7 per cent - implying house prices start to pick up in the first half of 2013. They will continue to edge higher, advancing 1 per cent in the year to June 2014.
The states, though, will vary considerably over those periods. Victorian prices will drop 2.9 per cent over the coming 6 months before trimming the full-year loss to 2.1 per cent by June. The following 12 months to June 2014 should see them fall again, though, to lose 0.7 per cent, the survey respondents predict.
NSW, too, can expect prices to be 1.9 per cent lower by the end of the year before a pick-up in the first half of 2013 will see the loss for the year trimmed to 1.5 per cent lower. The state's house prices, though, should notch a 0.4 per cent drop in the July 2013-June 2014 period, the respondents estimated.
By contrast, WA's house prices are likely to rise 0.5 per cent in the current half and be 1.6 per cent higher by June 2013. Prices will accelerate to notch a gain of 4.1 per cent the following year to June 2014.
In Queensland, house prices will shed another 0.8 per cent in the current half before rebounding strong in the first half of 2014 to 0.5 per cent higher than now by then. The following 12 months should see house prices add another 2.5 per cent, the respondents predict.
In contrast to house prices, average national rents are still climbing - with 0.4 per cent growth in the June quarter - but are growing at less than half the speed they were in the first quarter this year.
Renters in the eastern seaboard states will be pleased to discover that while property owners out west are winning, their renters are well behind and the gap is expected to widen.
NAB says that ‘‘longer-term outlook for rents [are] softer in all states over the next one to two years, except WA’’.
The most in-demand properties are inner-city houses and low-rise apartments, but overall demand remains soft.
Houses priced under $500,000 have the best chances of increasing their values, the report says, while the growth potential of properties valued over $2 million remains ‘‘poor’’.
Adding to this gloomy picture for homeowners, property analysts RP Data released research today stating that ‘‘the most significant barrier to a housing market recovery’’ is the 301,414 unsold Australian homes.
The situation is improving, but not fast enough to arrest the housing slump, the reserach group said.
‘‘While the number of homes available for sale is very high, the volume has been reducing and is about about 7.4 per cent lower than when supply levels peaked last November,’’ said Cameron Kusher, senior researcher at RP Data.
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