ANZ’s Head of Australian Economics, David Plank, says they believe both house prices and construction are set for a “period of decline” which will weigh on the housing market “for some time” thanks to finance availability and interest rates.
“We think housing prices will nudge lower through to 2020, before stabilising through the remainder of that year. But we do not anticipate the scale of price declines accelerating,” he said.
ANZ’s recent Housing Update also showed many indicators are around the worst levels in years. Investor credit is growing at the slowest rate on record and housing credit growing at the slowest rate since 2013. Prices are also posting their sharpest declines since 2009, while auction results are the lowest since 2012.
The Property Council’s latest December quarter data found sentiment in the property market is now at its lowest in two years, with NSW and Victoria bearing the brunt.
Demand from foreign buyers is still falling – to 13% from a peak of 24% in 2016. Survey respondents said they expect tighter credit conditions and higher interest rates over the next year.
Bad news for village operators relying on residents being able to sell the family home to downsize to a village – and for developers looking for investors to fund new construction.
