From NAB today comes the second of the big bank’s quarterly property industry surveys. Like that of the ANZ is shows a fading pulse.
NAB Residential Property Index falls in Q2 to its lowest print since mid-2013…
VIC overtakes NSW as current best performing state with WA now clearly weakest. VIC and QLD most confident over next 1-2 years, with WA and SA/NT least optimistic.
Growth tipped to be fastest in QLD (2.3%) and VIC (2.1%) next year, slowest in WA (0.2%). QLD (3.1%) and VIC (2.4%) strongest for capital gains in 2 years time. WA (0.9%) and SA/NT (1.7%) weakest.
Rental growth slowed in VIC (0.7%) and NSW (0.5%), but they remain the strongest states for income returns.
In contrast, sagging house prices and rising vacancies continue to impact rents in WA (-2%).
Lower returns forecast in all states in next 1-2 years…NSW (1.7% & 2.4%) and QLD (1.8% & 2%) expected to provide the best income returns over the next 1-2 years; WA the worst (-1.1 & -0.2%).
Local investors much more active in new housing market in Q2 accounting for nearly 1 in 3 of all new property sales. Local investors also continue to play a key role in the established market (25% of all buyers).
The overall share of foreign buyers in established property Australia-wide fell from 13.9% in Q1 to 10.2% in Q2 (lowest in 2 years). In the new property market, it fell to 7.2% from a high of 9.5% in Q1.
Foreign buyers reached a new a high of 17% in VIC (around 1 in 6 new properties). Conversely demand pulled back sharply in QLD and was flat in NSW.
That last finding is obviously contrary to this morning’s ANZ report. Of the two reports, this one has the larger and more comprehensive sample.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
