Further property price rises predicted

Further property price rises predicted

Posted on Thursday, April 17 2014 at 12:44 PM

A recent study showing property price growth in the first quarter of 2014 supports predictions of future capital gains, according to National Australia Bank (NAB).

A
recent study showing property price growth in the first quarter of 2014 supports
predictions of future capital gains, according to National Australia Bank
(NAB).

The
bank’s Residential
Property Index results for the first three months of this year recorded
an increase of one point to 37 points.

The
NAB says the outcome reflects improved sentiment in the Northern Territory,
South Australia and New South Wales, which offset softening in Victoria and
Western Australia.

The NAB report notes there’s an expectation of
house prices improving over the coming twelve months.

Alan
Oster, chief economist at NAB, says the Sunshine State will be the big winner
in the short term.

“House price expectations strengthened in all
states except Victoria, with Queensland expected to show the biggest gains in
the next one to two years.”

Price growth over the coming year is tipped to
be 3.5 per cent in Queensland, and 3.3 per cent in NSW.”

In the two years to March 2016, Queensland will
once again lead the way with a 4.4 per cent predicted gain.

Capital cities are the place to be according to Oster.

“We expect average capital city house prices to
rise by 7.7 per cent through the year to end 2014, with Brisbane to be the
strongest city for capital gains.”

He says the biggest impediment to buying new
property is seen as a lack of both credit availability and housing
affordability, however concerns over interest rates are starting to rise.

“In the established housing market, employment
security continues to be seen as the biggest impediment to buying property in
most states, with NAB expecting further softness in the labour market.”

Oster says despite these negative influences,
the bank remains bullish about real estate.

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