Yahoo Finance NAB’s worrying rent price prediction
Over the next 12 months rental prices are expected to rise 3.5 per cent, outpacing house price growth, NAB has predicted.
In its quarterly NAB Residential Property Report, the major bank also said it expects house prices to fall 10 per cent next year - following similar predictions from other major banks.
NAB said while rents are expected to rise across the whole country there will be noticeable differences in prices from state to state.
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“In the next 12 months, property professionals have indicated rents will grow fastest in the ACT (7.1 per cent), NT (6 per cent) and WA (5.6 per cent), with more modest gains predicted for TAS (2.1 per cent), VIC (2.5 per cent), SA (2.7 per cent), NSW (3.4 per cent) and QLD (3.6 per cent),” NAB said.
And prices are expected to keep rising next year too, with NAB predicting rents will remain the highest in the Northern Territory and Western Australia in two years’ time.
“Rental growth is expected to be slowest in SA (1.9 per cent) and TAS (2.1 per cent), with expectations revised down from 3.2 per cent and 2.4 per cent in each state respectively in Q3,” NAB said.
“Expectations were also scaled back in QLD to 2.6 per cent and NSW to 3.3 per cent, but lifted to 3.4 per cent in VIC.”
Expectations for property prices
NAB said it expects the Reserve Bank will begin hiking rates in November 2022, which will slow house price growth.
“With our view on rate hikes coming forward, we now expect the turning point in property prices to occur in the second half of 2022,” NAB said.
“That sees a flatter outcome in 2022 and a slightly larger fall in 2023. Overall, we see dwelling prices rising around 3 per cent in 2022 before a decline of around 10 per cent in 2023.”
NAB said the fall in house prices should not be a cause for concern after the astronomical rise seen last year.
“We see this as a relatively orderly decline, and it is important to remember this correction comes after a very sharp run up in prices over the last year,” it said.
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