Confidence falls with Sydney housing market forecast to be the worst in 2018: NAB
The Sydney house market is forecast to fall 3.7 percent this year, according to the latest NAB Residential Property Index which saw confidence fall to its lowest level since mid-2016 and less than half the average.
The 1.6 percent fall in unit prices in Sydney in 2018 will not be as much as for houses.
NAB's Residential Property Index is 'a measure of sentiment among property professionals based on expectations for house prices and rents'.
Sentiment waned in all states, with the biggest falls in WA and NSW.
The report suggests weaker than expected residential markets in Melbourne, Brisbane and Perth would add to ongoing weakness in Sydney.
It had prompted NAB to cut its outlook for housing prices this year to expect house prices this year to fall 1.8 percent from the 0.8 percent it forecast in April.
Unit prices are tipped to fall 1.7 percent.
Confidence also fell to a new survey low, pulled down mainly by NSW and VIC where the outlook for house prices has been scaled back sharply.
The outlook for rents remains positive in all states and is likely placing upward pressure on yields.
It noted housing demand from first home buyers continued to offset a reduction in demand from foreign buyers in new and established housing markets, with state government incentives and moderating house prices assisting these buyers in moving onto the property ladder.
Property professionals have said credit constraints are impacting housing markets more than they have for a number of years amid intensified lending scrutiny by banks and APRA-inspired tighter credit policies.
NAB’s is of the opinion that the weakness in dwelling prices seen over the past year is likely to persist in 2018 and 2019 although they expect moderate rather than sharp price falls.
Having revised their forecasts NAB now predict that there will be a slightly larger decline in 2018 and a small fall in 2019 (which they previously predicted would be a small increase), driven by continued weakness in Sydney and Melbourne as well as a sharper decline in unit prices in Brisbane.
NAB forecasts that house prices will flatten in aggregate in 2020.
