Housing Sentiment

<p>As national house prices continue to climb, consumers are not convinced that now is a good time to buy property, according to new research by Finder, Australia&rsquo;s most visited comparison site. &nbsp;</p>

<p>Finder&rsquo;s Property Positivity Index shows that the proportion of Australians who think now is a &ldquo;good time to buy&rdquo; is at its lowest ebb since lockdowns started last year.</p>

<p>As of May 2021, the index is sitting at 49% &ndash; only a few points higher than the pessimistic low of 42% in April 2020.&nbsp;</p>

<p>In December 2020, a record-high number of people (67%) said it was a good time to buy, however this figure has since dropped by 18 points.&nbsp;</p>

<p>Graham Cooke, head of consumer research at Finder, said that Australians&rsquo; property optimism has yoyoed throughout the past 12 months.&nbsp;</p>

<p>&ldquo;As lockdowns rolled out across Australia and open house inspections declined, Finder&rsquo;s Property Positivity Index nosedived only to recover again as the housing market sprang back to life.&nbsp;</p>

<p>&ldquo;Both the rock-bottom cash rate and FOMO have turbo-charged prices but fears of a property bubble are making many Aussies pessimistic that now is the time to buy,&rdquo; he said.&nbsp;</p>

<p>[smartcode_project:default project_id=29048 project_image_fid=151677]</p>

<p><strong>Property positivity toward prices spikes</strong></p>

<p>Despite fewer people thinking now is a good time to buy, approximately 74% feel that property prices in their area will continue to rise over the next 12 months &ndash; up from a low of 24% in April 2020.&nbsp;</p>

<p>When asked about whether prospective first-time buyers with a deposit saved may miss an affordability window if they do not purchase within the next year, Finder&rsquo;s RBA panelists were divided.&nbsp;</p>

<p>In total, 9 experts said they would miss out (64%), while the remaining 7 (36%) said they wouldn&rsquo;t.</p>

<p>Dale Gillham, stock market analyst from Wealth Within said buyers would not be missing a window.</p>

<p>&ldquo;This situation has been talked about since Adam was a boy and it will continue to be into the future. I have never seen a time when we thought property was cheap for anyone let alone first-time buyers,&rdquo; he said.&nbsp;</p>

<p>Rebecca Cassells of Bankwest Curtin Economics Centre said buyers may miss a window if they don&rsquo;t buy.</p>

<p>&ldquo;Increased house prices driven by significant stimulus and low interest rate environment has the potential to lock out future first home buyers by making it even harder to come up with the deposit needed to enter the market.&rdquo;</p>

<p>Cooke said that window of opportunity or not, there&rsquo;s been a significant turnaround in property price expectations over the past year.&nbsp;</p>

<p>&ldquo;The last 6 months resulted in the largest amount borrowed to buy housing in any 6-month period in Australian history. The property market really is surging back into life,&rdquo; Cooke said.&nbsp;</p>


Finder’s Property Positivity Index shows that the proportion of Australians who think now is a “good time to buy” is at its lowest ebb since lockdowns started last year.

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Consumers increasingly unconvinced to buy property: Finder Survey

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<p>EXPERT OBSERVER</p>
<p>There has been a turnaround in housing sentiment post-election.<br><br></p>
<div><a href="https://1.bp.blogspot.com/-2O6ydv5d_yc/XVni9mLphDI/AAAAAAAAxY4/Wqb10jHOMQ8QStGBIlxAYxOTafNm1xwugCLcBGAs/s1600/C8117FDD-B268-4C8B-A681-0065B5FC871E%2B%25282%2529.jpeg"><img src="https://1.bp.blogspot.com/-2O6ydv5d_yc/XVni9mLphDI/AAAAAAAAxY4/Wqb10jHOMQ8QStGBIlxAYxOTafNm1xwugCLcBGAs/s640/C8117FDD-B268-4C8B-A681-0065B5FC871E%2B%25282%2529.jpeg" width="640" height="468" data-original-height="607" data-original-width="828"></a></div>
<p>Source: CoreLogic</p>
<div>There have been other factors, of course, including two rate cuts.</div>
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<div>The second rate cut was only delivered six weeks or so ago, and there can be a long lag effect - the full impacts many not be felt for up to 18 months</div>
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<div>In addition, there were very strong auction results reported for the inner suburbs of Sydney and Melbourne by agents and media alike this weekend, especially for properties located within 15 minutes commute of the Central Business District.<br><br>CoreLogic found that every single apartment in Sydney's city or inner south taken to auction this weekend sold under the hammer, which is remarkable.<br><br>For freestanding inner-suburban houses, it was a bit of a frenzy. </div>
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<em><strong>PETE WARGENT</strong> is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em><span> </span>
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The post-election housing sentiment bounce: Pete Wargent

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<p>In the wake of the coronavirus outbreak and the associated shutdown of economic activity, sentiment towards residential property and all sectors of commercial property declined sharply, according to the ANZ.</p>
<p>In their June Quarter ANZ property council survey in answer to new questions, specially set for this survey, they found that expectations of a negative impact from the coronavirus were broadly based and similar across the states. Nationwide, virtually all respondents expect to be negatively impacted by the pandemic, with all states recording similar responses.</p>
<p>10% of businesses report that the impact is already so serious it is affecting their viability. A large majority of firms reported that the virus was already impacting current construction schedules. Firms expect the impact of the virus to be largest on the tourism sector. </p>
<p>In the residential sector, price expectations have turned around sharply and a net 36% of respondents now expect house prices to decline over the next year.</p>
<p>Employment in the sector is also expected to decline, but the outlook for construction activity is more balanced. The outlook for the residential sector is negative across all states and territories. </p>
<p>In commercial property, across all sectors and states sentiment declined sharply. Confidence in the tourism and retail sectors was the weakest, but sentiment also declined sharply in the office and industrial sectors.</p>
<p>ANZ Senior Economist Felicity Emmett said, "after recovering through much of 2019, property sentiment has taken a hit from the coronavirus and the shutdown measures put in place by the federal and state governments to contain it."</p>
<p>"Just as the lockdown measures have been broadly-based, the deterioration in sentiment has been equally widespread. Sentiment across the residential, office, industrial, retail and tourism sectors have all been sharply impacted."</p>
<p>"Not surprisingly, the tourism sector has been the hardest hit."</p>
<p>"Across all sectors, price expectations have turned around sharply, employment prospects have deteriorated and the construction outlook has turned down."</p>
<p>"The construction sector is not subject to a shut-down at present, but the downturn in the outlook is concerning, and suggests that the impact of the virus may be more long lasting on the property sector. With long lags associated with construction approvals, commencements and completions, a quick rebound once the lockdown is eased seems unlikely"</p>
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Coronavirus infecting property sentiment: ANZ

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<p>Sydney’s outlook on housing dipped further in May, despite the easing of pandemic restrictions, according to the UDIA Urbis Home Purchaser Sentiment Survey.</p>
<p>The poll - carried out <span>between May 7 and 12 - </span>found that the proportion of residents feeling ‘very positive’ about the property market dropped six percentage points (to 21 per cent) compared with this time last year.</p>
<p>Overall, homeowners had a more pessimistic outlook than renters.</p>
<p>The proportion of homeowners who were positive about the market fell seven percentage points to 54 per cent over the year.</p>
<p>This was compared with just a two-percentage point drop among renters (down to 50%).</p>
<p>"The report shows a downward shift in sentiment since the last survey, with increased pessimism around purchasing property in the next 12 months," associate director of Urbis Kylie Newcombe said.</p>
<p>"The softening in sentiment was, however, relatively moderate, suggesting cautious optimism by prospective purchasers in the medium-term fundamentals of the Sydney property market.</p>
<p>Almost half of all Sydney residents also believe that house prices will drop in the next six months – more than double the number from a year ago.</p>
<p>Just over one in four believe prices will drop over the next 12 months – a seven percentage points rise compared with a year ago.</p>
<p>The city, and Sydney's east, saw the residents who were the most negative about the prospect of home prices, with 55 per cent expecting prices to drop over the next six months.</p>
<p>More than two-thirds said they were unlikely to buy a property in the next 12 months – a seven percentage points increase from July last year.</p>
<p>And 72 per cent said they were unlikely to buy in the next six months.</p>
<p>In more bad news for apartment developers, 61 per cent said they preferred free-standing houses compared with units or apartments.</p>
<p>However, the report noted that "it is not possible to conclude a relationship between COVID-19 and preferences.”</p>
<p>There was also a strong support for stamp duty reform as a tool to improve confidence among home owners and some renters.</p>
<p>Fifty-four per cent of renters said policies targeting first home buyers would have a positive effect on their confidence.</p>
<p>Given a choice, Sydney residents would like to live in Parramatta, Castle Hill, Chatswood, Blacktown and Balmain.</p>
<p>The poll surveyed 531 Sydney residents.</p>
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Sydney housing sentiment slumps further in May: UDIA Urbis Home Purchaser Sentiment Survey

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<div class="column"><span style="line-height: 1.3em;">Westpac Economics research for July has found housing sentiment falling to the first sub-100 level since June 2010.</span></div>
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<span style="line-height: 1.3em;">Respondents to the monthly Red Book survey question on whether or not now was the </span><span style="line-height: 1.3em;">time to buy fell 15.4% to 94.8. </span>
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<div class="column"><span style="line-height: 1.3em;">The report, however did note 5-8ppts of the July fall may be seasonal.</span></div>
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<div class="column"><span>Allowing for a seasonal adjustments, the index reading of 94.8 is well under the average of 125.</span></div>
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<div class="column">The survey found states with a weak buyer sentiment and strong price outlook are Victoria and New South Wales, weak sentiment and weak price outlook in Western Australia and strong sentiment and strong price outlook in Queensland and South Australia.</div>
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Time to buy - national housing sentiment falling: Westpac Economics

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<p>GUEST OBSERVER</p>
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<div class="column"><span style="line-height: 1.3em;">Aussie consumers seem to see the appointment of a new Prime Minister and cabinet as signalling a “fresh” start. Whether the initial positivity is sustained will depend on the future performance and direction of the new administration. But increased confidence is certainly a positive for the Australian economy – hopefully translating into increased spending, investment and employment.</span></div>
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<br><span style="line-height: 1.3em;">The Government leadership change would have been the main factor influencing consumer confidence last week. Other factors include a 2% lift in the sharemarket; stabilisation of the Aussie dollar near US71-72 cents; positive testimony on the economy by the Reserve Bank Governor; and the decision of the US Federal Reserve to leave rate settings unchanged. All these factors would have played a role in the rebound of consumer confidence.</span>
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<br><span style="line-height: 1.3em;">More confident consumers are more likely to spend, but there are no guarantees. But as the Reserve Bank Governor observed, the most important of the five questions posed to consumers each week are those relating to household finances. And even before the latest survey, consumers had an above-average assessment of the state of their household finances compared with a year earlier.</span>
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<br><span style="line-height: 1.3em;">The Bureau of Statistics confirms that Sydney’s property market is the exception, not the rule. While Sydney’s average home price was up 18.9% over the year – the fastest rate in the 12-year history of the series – Melbourne prices were up 7.8%and the average gain of other capital cities was just 1.2%. Sydney is witnessing a building boom and home prices will be more settled in 12-18 months. </span>
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<div class="column"><span style="line-height: 1.3em;">The ABS has quietly revised the employment by industry data released last Thursday. Overall job gains in the quarter weren’t revised (still up 78,000) rather the changes occurred in terms of industry gains and losses. Previously Mining was reported to have led the gains in jobs but the 19,300 increase is now revised to show a 3,500 gain. Professional, Scientific and Technical Services is now shown to have led job gains in the quarter (up 18,100).</span></div>
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<p><strong>What do the figures show?</strong></p>
<p><strong>Consumer sentiment</strong></p>
<p><span>The weekly ANZ/Roy Morgan consumer confidence rating rose by 8.7% 114.5 in the week to September 20. Confidence is up 1.4% over the year and 2.7% above the average level of 111.5 recorded since 2014.</span></p>
<p><span>All of the five components of the index rose in the latest week:</span></p>
<ul>
<li><span style="line-height: 1.3em;">The estimate of family finances compared with a year ago was up from +7 to +10;</span></li>
<li><span style="line-height: 1.3em;">The estimate of family finances over the next year was up from +21 to +27;</span></li>
<li><span style="line-height: 1.3em;">Economic conditions over the next 12 months was up from -18 to +3;</span></li>
<li><span style="line-height: 1.3em;">Economic conditions over the next 5 years was up from -3 to +10;</span></li>
<li><span style="line-height: 1.3em;">The measure of whether it was a good time to buy a major household item was up from +20 to +23 points.</span></li>
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<p><strong>Residential property prices</strong></p>
<p><span>The Bureau of Statistics (ABS) has released its Residential Property Price indexes.</span></p>
<p><span>"The price index for residential properties for the weighted average of the eight capital cities rose 4.7% in the June quarter 2015. The index rose 9.8% through the year to the June quarter 2015.</span></p>
<p><span>The capital city residential property price indexes rose in Sydney (+8.9%), Melbourne (+4.2%), Brisbane (+0.9%), Adelaide (+0.5%) and Canberra (+0.8%), was flat in Hobart (0.0%) and fell in Perth (-0.9%) and Darwin (-0.8%).</span></p>
<p><span>Annually, residential property prices rose in Sydney (+18.9%), Melbourne (+7.8%), Brisbane (+2.9%), Canberra (+2.8%), Adelaide (+2.7%) and Hobart (+1.5%) and fell in Darwin (-1.8%) and Perth (-1.2%).”</span></p>
<p><span>The ABS notes that as at June 2015 there were 9.53 million homes in Australia and the average price was $604,700. The number of homes has risen by 1.72% over the past year, ahead of the 1.42% growth of the population. But the number of homes in Sydney is up 1.3% whereas as homes in Victoria is up by 1.9%.</span></p>
<p><span>CommSec estimates that the increase in the value of homes has boosted per capita wealth by just over $26,000 over the past year. Also we estimate that the number of people per home fell from 2.501 to a 3-year low of 2.498 </span><span style="line-height: 1.3em;">people per home in the June quarter.</span></p>
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<p><strong>What is the importance of the economic data? </strong></p>
<span style="line-height: 1.3em;">The </span><span style="line-height: 1.3em;">ANZ/Roy Morgan weekly survey of consumer confidence </span><span style="line-height: 1.3em;">closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank.</span><br><p style="line-height: 1.3em;">The Australian Bureau of Statistics (ABS) provides quarterly data on residential prices. The figures provide further perspectives on the state of the housing purchase sector. </p>
<p style="line-height: 1.3em;"><strong><span style="line-height: 1.3em;">What are the implications for interest rates and investors?</span></strong></p>
<span style="line-height: 1.3em;">The latest consumer confidence data just reinforces the Reserve Bank view. Even before the latest survey, the RBA noted that views on family finances were above average and supporting consumer spending. The lift in the value of Australian homes has further boosted wealth levels in Australia, and may underpin future spending.</span>
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<br><span style="line-height: 1.3em;">Are more Gen Y children moving out of home into their own places? Perhaps. The latest data indicates that the number of people per home fell to a 3-year low in the latest quarter. Low interest rates and low rent levels have encouraged more young people to get their own homes, either singularly or sharing accommodation with others. </span>
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<div class="column"><span style="line-height: 1.3em;">More home creations add to demand for household appliances, furniture and floor coverings.</span></div>
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<div class="column"><span style="line-height: 1.3em;">CommSec expects no change to interest rates over the coming year. </span></div>
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<p><span style="line-height: 1.3em;"><em>Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.</em></span></p>
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Biggest weekly lift in consumer confidence: CommSec's Craig James

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<p><span>The housing market sentiment has softened amongst </span>property professionals, according to the first NAB residential property survey since the official RBA cash rate cut in May</p>
<p>The NAB Residential Property Index fell to +3, from +6 in Q1 2016, to remain below its long term average of +13.</p>
<p>Sentiment moderated in all states except South Australia and the Northern Territory, which rose 19 points, albeit still in negative territory.</p>
<p>New South Wales joined Victoria as the best performing state, followed by Queensland.</p>
<p><span>Confidence has however improved, with the national index rising to +29 next year, and +36 in two years’ time.</span></p>
<p><span>The NAB Residential Property Survey for Q2 2016 also found that respondents expect Victoria and Queensland to provide the best capital returns over the next one to two years.</span></p>
<p><span>NAB chief economist Alan Oster said that it's still a mixed picture across Australia, with house price expectations for the next 12 months holding up well in the eastern states.</span></p>
<p><span>He suggested that the house price expectations will stay flat in South Australia and Northern Territory, and will continue to fall sharply in Western Australia.</span></p>
<p>NAB Economics has also revised its national house price forecasts for 2016 upwards to 5.1% (from 1.5%). Unit price forecasts were revised up to 3.6% for 2016.</p>
<p>“Our upwards revisions in price forecasts reflects the strength in prices to date. Over the last six months, Sydney and Melbourne prices have increased by an annualised rate of nearly 19% and 12% respectively,” Oster said.</p>
<p><span>“However, while there is significant amount of uncertainty over the outlook for prices, we expect that this renewed momentum in the housing market is unlikely to be sustained over the longer term.”</span></p>
<p><span>Looking out to 2017, NAB forecasts prices to be flat across most capital cities, with falls particularly in Perth, Melbourne and Brisbane.</span></p>
<p><span>While the declines in Perth largely reflect economic conditions, the falls in Melbourne and Brisbane can be partly attributed to added supply and weaker investor demand.</span></p>
<p><span>“NAB is forecasting a much softer residential property market, with 0.5% growth in house prices and nearly 2% decline in unit prices in 2017,” Mr Oster said.</span></p>
<p><span>NAB Economics continues to hold the view that residential property prices are unlikely to experience a sharp ‘correction’ without a trigger from a shock that leaves unemployment or interest rates sharply higher.</span></p>
<p><span>The residential property survey series also measures foreign buyer activity in the Australian housing market.</span></p>
<p>Market share of foreign buyers in new Australian housing markets fell for the third straight quarter in a row – to 10.4%. A sharp fall in foreign buyer activity in Queensland was offset by growth in Victoria and a modest rise in NSW. Market share of foreign buyers in established markets was unchanged at 7.2%.</p>
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Housing market sentiment softens following the RBA rate cut: NAB residential property survey

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<p>Housing market sentiment improved in the third quarter of 2017, as more property professionals surveyed by NAB reported positive rental growth during the quarter and house prices continued to rise in most states. </p>
<p>The NAB Residential Property Index rose 6 points to +20 in Q3, with sentiment (based on current prices and rents) improving in all states except NSW (which edged down). Sentiment rose sharply in Victoria (up 27 to +63) and in Queensland (up 4 to +16). </p>
<p>“The NAB Residential Property Survey shows an improvement in market sentiment across most states last quarter, but we continue to see market conditions that vary across different locations,” NAB chief economist Alan Oster said.</p>
<p>“The momentum is clearly with Victoria, while NSW is experiencing something of a slowdown.”  </p>
<p>About 300 property professionals participated in the Q3 2017 survey. </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/10/13/NABQ3.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/10/13/NABQ3.png" alt=""></p>
<p>Confidence (based on forward expectations for prices and rents) was up in all states, led by Victoria, with WA rising the most. </p>
<p>In NSW, despite the weakening price growth, higher confidence is being supported by expectations for higher rents.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/10/13/NABINDEX.png" target="_blank">Click to enlarge</a> </p>
<p><img src="https://www.urban.com.au/images/2017/10/13/NABINDEX.png" alt=""></p>
<p>First home buyers were among the key buyers in both new and established housing markets, accounting for over 36% of all sales in new housing markets and around 29% in established markets. </p>
<p>Meanwhile, the market share of foreign buyers in new property markets fell to a five-year low of 9.5%, potentially due to lending restrictions on foreign buyers. Low foreign buying activity in new property markets was led by Victoria, where the share of sales to foreign buyers fell to 14.4% (20.8% in Q2). </p>
<p>For the first time, tight credit was identified as the biggest constraint on new developments in all states, while access to credit was the biggest barrier for buyers of established property. Price levels were the biggest concern in both Victoria and NSW. In WA and SA/NT, property experts said that employment security was the biggest barrier to buying an established home. </p>
<p>NAB Group Economics has revised its national house price forecasts, predicting an increase of 3.4% in 2018 (previously 4.3%) and easing to 2.5% in 2019. Unit prices are forecast to rise 0.5% in 2018 (-0.3% previously), with a modest fall expected in 2019. </p>
<p>“More moderate market conditions reflect a combination of factors which vary across markets, including deteriorating affordability, rising supply of apartments, tighter credit conditions and rising interest rates in the second half of 2018,” said Oster. </p>
<p>“But still relatively low mortgage rates, a favourable housing supply-demand balance and strong population growth population growth should continue to provide support for prices going forward.” </p>
<p>“By capital city, house price growth is forecast to be moderate outside of Perth - where prices are flattening out - consistent with good business conditions and better employment growth.” </p>
<p>“Melbourne and Hobart are currently experiencing solid growth in prices; Sydney is cooling and we expect Brisbane and Adelaide will cool. Finally, we expect 2018 to mark the beginning of a gradual turnaround for Perth.” </p>
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Sentiment rises despite tightening credit among property experts in Q3: NAB

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<p>EXPERT OBSERVATION</p>
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<p><span>Sentiment towards the Australian housing market improved in Q1 as strong gains in WA and QLD offset falls in NSW and VIC. </span></p>
<p><span>Confidence improved sharply in WA, but fell further in NSW amid expectations for bigger price falls. </span></p>
<p><span>NAB has lowered its house price forecast for 2018 on continuing weakness in Sydney and a softer Melbourne market.</span></p>
<p>NAB recently suggested they <a href="https://www.urban.com.au/expert-insights/buying/82476-only-sydney-house-prices-to-fall-in-2019-nab" target="_blank">only see Sydney house prices falling in 2019</a>, with a stabilization in 2020.</p>
<p><span>The NAB Residential Property Index rose 3 points to +23 in the March quarter 2018 and remains well above its long-term average (+14). </span></p>
<p><span>“But the overall result is masking an ongoing shift in sentiment across states” NAB Chief Economist Alan Oster said. </span></p>
<p><span>It fell further in NSW and Victoria, driven down by weakening house prices, and was also lower in SA/NT. </span></p>
<p><span>Sentiment towards the housing market in WA however rose strongly and recorded its first positive read since early-2014. It also continued to strengthen in Queensland. </span></p>
<p><span>Overall confidence levels were broadly unchanged, but have risen strongly in WA and softened in NSW. “Survey house price expectations are mirroring these trends” said Mr Oster. </span></p>
<p><span>Property experts are predicting bigger house price falls in NSW and have scaled back their outlook for Victoria. </span></p>
<p><span>But they are much more bullish in WA, with stronger growth also expected in Queensland. </span></p>
<p><span>Among other key survey findings, the market share of first home buyers climbed to new survey high, but that of resident investors hit a new low. </span></p>
<p><span>According to Mr Oster: “Recent efforts by state governments to improve housing affordability is helping first home buyers, especially in Victoria and NSW, but the </span><span>APRA inspired crackdown in investor lending is hurting investors.” </span></p>
<p><span>Surprisingly, there was a small increase in the share of foreign buyers in new property markets after having fallen to a 6-year low in the previous quarter. This was led by NSW and WA. </span></p>
<p><span>“Property experts also continue to tell us that credit access is still the biggest constraint on new housing development in the country and the biggest impediment for buyers of existing property” Mr Oster said. </span></p>
<p><span>But concerns over interest rates are growing. </span></p>
<p><span>“We’re not surprised given NAB’s own view is that interest rates will start rising gradually from late-2018, albeit with the risk this could be delayed until 2019” said Mr Oster. </span></p>
<p><span>NAB’s forecasts on residential prices </span></p>
<p><span>NAB’s view for 2018 now has a small fall in house prices in 2018 (now -0.8% was +0.7%). This is largely related to continuing weakness in the Sydney market (-3.4%) and a softer Melbourne market (+0.1%) with little improvement now expected during 2018. </span></p>
<p><span>According to Mr Oster: “Looking forward it’s hard to see a near term rebound in Sydney and Melbourne house prices, especially given consumer concerns over the cost of living and high levels of household debt.” </span></p>
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<p><span>National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686 </span></p>
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<p><span>“Strong performances in Tasmania and to lesser extent in regional areas, along with higher confidence in the West and Queensland won’t offset the aggregate effects of lower prices in Sydney and Melbourne. Nor will increased first home owner demand fill the gap” added Mr Oster </span></p>
<p><span>For 2019, our house price forecasts remain broadly unchanged at +0.8% with only Sydney expected to fall (albeit modestly). </span></p>
<p><span>Apartment forecasts are also broadly unchanged (-0.8% in 2018 &amp; -1.8% in 2019) reflecting large stock additions and softer outlook for foreign demand. </span></p>
<p><span>For 2019, weakness will likely be concentrated on the Eastern seaboard - with apartment prices expected to fall in Sydney, Melbourne and Brisbane. </span></p>
<p><span>“Naturally, any additional changes to government or prudential policy to address affordability or financial stability concerns are likely to have an impact on these forecasts” said Mr Oster. </span></p>
<p><span>About 300 property professionals participated in the Q1 2018 survey.</span></p>
<p><em>Alan Oster is group chief economist, National Australia Bank, and can be contacted </em><a href="https://business.nab.com.au/author/alan-oster/"><span class="s2"><em>here</em></span></a><em>.</em></p>
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