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Australian property prices predicted to fall well into 2019

Australian property prices predicted to fall well into 2019

Australian sentiment towards property is at a two-year low, and it’s expected to worsen as property prices in most major cities are predicted to keep falling well into 2019 according to NAB economists.

Research from NAB has predicted an average house price fall of 1.8 per cent across capital cities this year, and a further slip of 0.1 per cent in 2019.

For unit prices, a drop of 1.7 per cent is expected in 2018, with a further slip of 2.2 per cent for 2019

Further, NAB’s latest quarterly property market survey indicates “both sentiment and confidence are running ‘well below average’”. 

NAB Residential Property Index

istock_79305201_small5

Source: Domain.com.au

In Sydney, house prices are expected to drop 3.7 per cent this year, and unit prices to fall by 1.6 per cent. Melbourne houses are also expected to slip by 2.3 per cent, and units by 1.4 per cent.

However, Hobart houses are expected to “strongly outperform”, with an 8.4 per cent rise in 2018 expected by NAB economists.

NAB research expects houses prices to “flatten in 2020, implying a peak-to-trough fall of 6.5 per cent and 2.5 per cent in Sydney and Melbourne, respectively”.

NAB hedonic house price forecasts (%)

2015

2016

2017

2018

2019

Sydney

15.5

10.7

2.1

-3.7

-0.7

Melbourne

15.8

9.5

9.1

-2.3

0.0

Brisbane

6.9

2.7

3.1

1.1

0.0

Adelaide

3.8

3.8

3.3

1.5

1.7

Perth

-4.2

-2.9

-2.6

-0.7

-0.2

Hobart

7.0

9.6

12.9

8.4

1.7

Capital City Avg.

11.2

7.3

4.0

-1.8

-0.1

Source: Domain.com.au

NAB hedonic unit price forecasts (%)

2015

2016

2017

2018

2019

Sydney

13.1

5.8

5.4

-1.6

-2.4

Melbourne

7.5

4.7

8.4

-1.4

-1.9

Brisbane

1.1

-3.0

-1.2

-2.4

-4.5

Adelaide

2.4

0.6

0.5

1.4

0.5

Perth

-2.8

-6.3

-0.9

-5.0

-0.2

Hobart

1.1

6.4

9.1

5.3

1.2

Capital City Avg.

8.2

3.5

5.1

-1.7

-2.2

Source: Domain.com.au

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This article was reviewed by Property & Personal Finance Writer Nick Bendel before it was published as part of RateCity's Fact Check process.

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