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House prices are expected to be relatively flat over the coming 12 months, unlike the rental market
NATIONAL HOUSE prices are expected to remain flat over the coming 12 months, with only 0.6 per cent growth forecasted.
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Western Australia is expected to lead the charge, with 1.1 per cent growth, followed closely by New South Wales with 0.9 per cent anticipated growth.
Meanwhile, property prices in both South Australia and the Northern Territory are tipped to fall by 0.1 per cent over the coming year.
But while property price growth will remain sluggish, rental expectations are improving, according to NAB’s Residential Property Index.
Nationwide, rents are forecast to grow 3.5 per cent in the next year and 5.2 per cent by March 2013.
The biggest gains during this period are once again forecast to occur in Western Australia and New South Wales.
Western Australia is expected to experience 4.6 per cent rental growth, while rents in NSW are tipped to climb 4.3 per cent.
In contrast, rental expectations are weakest for Queensland and South Australia, with 2.5 per cent and 2.9 per cent growth respectively.
According to the NAB Residential Property Index, owner occupiers were nominated as the key demographic over the year – with this sector accounting for approximately 43 per cent of all new residential developments.
The second largest share of the market is expected to be Australian resident investors, who are tipped to account for 33 per cent of the market – up from 24 per cent last quarter.
NAB economist Alan Oster attributes this increase to the recent changes in superannuation rules, which ultimately makes it easier for investors to hold property within self-managed super funds.
First home buyers on the other hand are only expected to account for around 16 per cent of the market, while overseas investors are expected to account for approximately 6 per cent.
