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You can find the current article at its original source at https://www.theguardian.com/australia-news/2018/oct/10/house-prices-set-to-continue-to-fall-for-another-two-years-survey-says
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| Confidence in housing market 'collapsing', NAB survey says | Confidence in housing market 'collapsing', NAB survey says |
| (35 minutes later) | |
| Confidence in the housing market is collapsing in Australia’s biggest states and prices will continue to fall for another two years, according to a survey of property professionals. | Confidence in the housing market is collapsing in Australia’s biggest states and prices will continue to fall for another two years, according to a survey of property professionals. |
| The NAB residential property index also recorded a sharp fall in sentiment about the prospects for the market for the second quarter in a row and is down 15 points to a seven-year low of –9 points, its first negative read since mid-2012. | The NAB residential property index also recorded a sharp fall in sentiment about the prospects for the market for the second quarter in a row and is down 15 points to a seven-year low of –9 points, its first negative read since mid-2012. |
| A day after the IMF downgraded its forecast for the Australian economy amid growing fears of a US-China trade war, the NAB survey paints a gloomy outlook for the once soaring property market. | A day after the IMF downgraded its forecast for the Australian economy amid growing fears of a US-China trade war, the NAB survey paints a gloomy outlook for the once soaring property market. |
| The fall in sentiment was driven by big falls in New South Wales and Victoria, NAB said, offsetting gains in the only state recording a positive outlook – Queensland. | The fall in sentiment was driven by big falls in New South Wales and Victoria, NAB said, offsetting gains in the only state recording a positive outlook – Queensland. |
| Confidence in the market was “collapsing”, NAB said, again pulled down mainly by the big two states where property professionals scaled back their outlook for prices. This was especially acute in Victoria where house price falls are now tipped to be much bigger. | Confidence in the market was “collapsing”, NAB said, again pulled down mainly by the big two states where property professionals scaled back their outlook for prices. This was especially acute in Victoria where house price falls are now tipped to be much bigger. |
| In Victoria, professionals’ confidence slipped 24 points to –5 (its lowest since 2012), while in NSW confidence hit a new low for the survey, falling 16 points to –25. | In Victoria, professionals’ confidence slipped 24 points to –5 (its lowest since 2012), while in NSW confidence hit a new low for the survey, falling 16 points to –25. |
| NAB’s survey concluded that house prices would continue to “correct” over the next 18 to 24 months, with Sydney falling around 10% peak to trough and Melbourne 8%. | NAB’s survey concluded that house prices would continue to “correct” over the next 18 to 24 months, with Sydney falling around 10% peak to trough and Melbourne 8%. |
| However, NAB said it would not be a “credit crunch event” leading to a collapse in prices. “Overall, we see this as a healthy correction which will help offset some of the risk in the household sector against a backdrop of a relatively healthy economy and labour market,” it said. “Our central scenario does not include a credit crunch event leading to disorderly falls in house prices.” | However, NAB said it would not be a “credit crunch event” leading to a collapse in prices. “Overall, we see this as a healthy correction which will help offset some of the risk in the household sector against a backdrop of a relatively healthy economy and labour market,” it said. “Our central scenario does not include a credit crunch event leading to disorderly falls in house prices.” |
| NAB also said the boom in Australian housing sales to foreign investors has also run its course, the survey said. Overseas share of total sales has fallen to a seven-year low of 8.1% in new markets and a survey low of 4.1% in established markets. | |
| Market professionals told NAB that access to credit was now much more difficult than it had been for years and many were concerned about the impact of rising interest rates on demand. | Market professionals told NAB that access to credit was now much more difficult than it had been for years and many were concerned about the impact of rising interest rates on demand. |
| Two other surveys released on Wednesday had more optimistic findings. | |
| The Westpac/Melbourne Institute survey of consumer sentiment index rose by 1% to 101.5 in October (a reading above 100 denotes optimism). | |
| In another snapshot of the housing market, Realestate.com said demand for housing was down but dismissed predictions that prices in Sydney and Melbourne could fall by 40%. | |
| Realestate.com, which analysed more than 80m property searches between July and September, admitted conditions for sellers in Australia’s two most populous cities “aren’t great” but that demand would be enough to prevent a hard landing. | |
| The Australian share market was flat on Wednesday lunchtime after hitting a four-month low on Tuesday. | The Australian share market was flat on Wednesday lunchtime after hitting a four-month low on Tuesday. |
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