Yahoo Finance NAB’s major property price prediction
Property prices could continue to rise, despite major hikes to the official interest rate.
NAB has revised its property price prediction, with Aussies looking to enter the housing market likely to get stung.
NAB said it now expected property prices to rise 4.7 per cent this year and a further 5 per cent in 2024.
“NAB has revised up our outlook for property prices, with the demand/supply imbalance offsetting the drag from reduced borrowing power and affordability as rates rise,” the NAB quarterly Residential Property Survey said.
“We see the RBA [Reserve Bank] lifting rates to 4.6 per cent by September, then staying on hold until 2024.”
Also read: Property pulse: What you can buy in Australia for $1 million this week
Also read: Top 66 ‘affordable’ Aussie city suburbs to buy property
What will drive property prices higher?
The major bank said prices would be driven by an increase in people wanting to enter the market, coupled with a lack of supply.
The report said eight in 10 “property professionals” saw construction costs as the main barrier to starting new property developments, with two in three pointing to rising interest rates.
The next most common barrier, according to one in two property professionals, were delays in obtaining planning permits and labour availability.
NAB said it expected property prices in Sydney to rise around 6.9 per cent this year and 4.9 per cent in 2024.
Melbourne should see property values rise 2 per cent this year and 7.4 per cent in 2024. Brisbane is expected to see prices rise 5.4 per cent this year and 2.9 per cent the next.
NAB predicts Adelaide will see property values climb 3 per cent this year and 3.7 per cent in 2024. Meanwhile, Perth will see prices rise 6 per cent this year and 6.2 per cent in 2024.
Hobart was the only capital city where prices were expected to drop 6.4 per cent this year and remain steady in 2024.
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