Faith in Australia’s housing market has tumbled to its lowest level in two years, prompting NAB to slash its property price predictions for the next few years.
The NAB residential property survey for the three months to June 2018 fell by 17 points to sit at its lowest level since mid-2016.
Sentiment reversed in all states, with the biggest falls in Western Australia and NSW, while Queensland and Victoria were also much softer.
NAB now forecasts housing prices to fall by more than previously expected this year, and has readjusted its view for 2019 from a small increase to a small decline – mainly dragged down by a weaker outlook for Sydney and Melbourne.
“We now expect a slightly sharper decline in 2018 and a small fall in 2019, driven by continued weakness in Sydney and Melbourne as well as a sharper decline in unit prices in Brisbane,” the bank’s economists predict.
“NAB also expects house prices to flatten in aggregate in 2020 – implying a peak to trough fall of 6.5 per cent and 2.5 per cent in Sydney and Melbourne respectively.”
The 300 respondents – including real estate industry workers, property developers and owners and investors – lost confidence looking forward.
Confidence, based on expectations for future house prices and rents, dived to a new survey low, dragged down mainly by NSW and Victoria.
In Victoria, confidence slipped to its lowest level in almost six years.