Residex’s founder, John Edwards, appeared on Switzer TV last night to give his views on the Australian housing market (video above).
Overall, Edwards describes the Australian housing recovery as “improving” but that “we are in a low growth period” and that there’s “no great growth spurt appearing anywhere”.
As shown above, Sydney and Perth are the star performers, although Edwards is surprised by Melbourne’s resilience (like most commentators, he expected it to underperform).
The unit market is performing less well than detached houses, due to higher amounts of supply. The ACT is performing particularly badly due to a huge ramp-up in construction, whereas Melbourne has once again defied the odds. Perth also appears to be rolling over as the mining boom fades:
Regional areas have performed more poorly, and appear to be undergoing a period of adjustment, particularly in Western Australia where the mining boom is coming off the boil:
The regional unit market is especially poor, painted in a sea of red:
Edwards remains bullish over the medium-term, however, predicting annual growth over the next five years at rates that would likely exceed growth in household incomes (see next table). According to Edwards, these forecasts are “based on the past”, which seems highly ambitious give the past drivers – the huge ramp-up in credit, abnormally high income growth, and favourable demographics – won’t be repeated and/or will turn into headwinds.
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