“The outlook for housing is getting worse, not better,” UBS analyst George Tharenou said.
The capitals are the worst off. The number of dwellings resold at a loss is now 10%. Meanwhile, 229,000 homes are under construction, meaning a huge supply pipeline of off-the-plan units is still likely to come.
The investment bank has warned the number of off-the-plan capital city apartments resold at a loss is now 14.3%, the highest level since the 1990s.
Building approvals are 9% lower than last year as the building boom ends, with some property developers moving to larger owner-occupier-targeted projects or repurposing residential sites as office buildings.
Overall, national house prices now down 2.7% in the past year, with Sydney 6.1% down and Melbourne 3.4% which doesn’t sound too bad. However, home loans have slumped 14%.
UBS says it now expects prices to drop by 10% to trough by 2020, with Sydney and Melbourne down about 15%.
Bad news for buyers – and for village operators looking to downsizers as a source of new residents.