Add Category![QLD_SM_NEWS_HOTELBOOKINGS_2JAN21](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 1280 720"%3E%3C/svg%3E)
Property professionals have revised their outlook for price falls in Queensland. Picture: Richard Walker
Fresh hope for Queensland home buyers with NAB finding agents now expect much steeper price falls than previously predicted as sentiment takes its biggest dive since the pandemic.
The National Australia Bank’s Residential Property Survey (Q3 2022) saw Queensland emerge with the second highest drop in housing market sentiment in the country, with its index level falling a whopping 36 points to sit at 10 points. It remains in positive territory along with WA (58pts) and SA (40pt) – which also had a major drop of 34 points – with the other majors in negative including ACT (down -92pts to -75), TAS -25pts, NSW -5 and VIC -2.
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NAB group chief economist Alan Oster says price adjustments will continue “in the near-term as the RBA lifts rates further”.
The NAB survey found that property professionals now expect steeper price falls in Queensland than earlier predicted, now expecting a -2.1 per cent fall in prices in the next year (they previously expected a 0.6 per cent rise). The only other part of the country where expectations saw a bigger drop was the ACT which was adjusted 2.8 percentage points worse.
Queensland price expectations were also pared back for the two year period – instead of clinging to a marginal gain of 0.1 per cent, property professionals now expect a -2.1 per cent fall, according to NAB.
On average, the survey saw prices falling nationally by -2.6 per cent over the next 12 months, which is double the -1.2 per cent that was forecast in Q2. The forecast for two years’ time is a fall of -1.4 per cent in prices (-1.3 per cent expected earlier).
NAB group chief economist Alan Oster said the housing market would continue its price adjustments “in the near-term as the RBA lifts rates further and the impact of the previous rate hikes continues to flow through”.
Qld has been a major target for interstate investors looking for affordable property with high rental yields. Picture: NCA NewsWire / John Gass
“It’s a big fall but then again we know that there has been big falls in house prices during the course of this year. The relative fall in Queensland is less than some of the others. If you use the six month annualised, it’s gone from 30 per cent down to about -5 in the last six to 12 months, but some of the others are much more steeper than that.”
Mr Oster said NAB’s own hedonic dwelling price forecasts expected Brisbane to see a -0.8 per cent fall across dwelling prices (houses and units) in 2022 and a much higher -9.4 per cent drop in 2023.
He said that drop was still half of what was expected out of falls in Sydney (-12.9 and -9.4) and Melbourne (-9.1 and -14.1) over that same period.
NAB’s outlook for property prices has remained broadly unchanged, with dwelling prices expected to fall by around 20 per cent from their peak.
“The declines are expected to be broadbased, but led by areas where affordability constraints are most binding. To date, Sydney and Melbourne have led the declines, but prices in other capital cities now appear to have also peaked – and the decline in Brisbane has accelerated.”
Mr Oster said NAB expected the Reserve Bank to lift its cash rate target to 3.1 per cent before it would take a break on rises.