Optimism towards Australia’s real estate market surged in the third quarter, new research has found.
National Australia Bank’s (NAB) Residential Property Index rose 17 points to +32 during the three-month period, which is the second best result since the financial institution began the survey.
Real estate in Sydney is likely to have contributed to the trend, with NAB noting that NSW climbing 37 points to +47.
Victoria was the second most positive state, registering an increase of 22 points to score +40, while Queensland ended the quarter on +31, having finished Q2 on just +4.
In fact, improvements were seen across the board, expect in Western Australia, with the state slumping from +42 to +13.
South Australia and the Northern Territory, which were scored together, rebounded from -9 in the second quarter to +2 this quarter.
NAB predicts faster price growth in the months ahead, although the bank admitted gains are likely to be “relatively modest”.
“Demand has improved for all types of new and established property,” it added.
“Property professionals continue to cite tight credit and employment security as the key obstacles to buying property.”
According to NAB, house prices advanced 1.3 per cent nationwide in the third quarter, with accelerated performances in all states except WA.
Capital values were up the most in NSW (1.9 per cent), although Victoria was close behind on 1.5 per cent.
“Property professionals are also more optimistic in regards to future house price growth,” NAB stated.
“National house prices are now tipped to rise 3.3 per cent in the next year and 4.5 per cent in [the] next two years, with stronger outcomes in all states.”
The bank said its outlook is less optimistic than survey respondents, with unemployment set to hamper the market over the next few quarters.
This is despite Australian Bureau of Statistics (ABS) figures yesterday (October 10) revealing that the number of people without work is actually declining.
ABS data showed a 0.1 per cent slump in the unemployment rate for September, while 9,100 additional people secured a job during the month.
However, NAB forecast unemployment to rise and has restricted its house price growth predictions to 3.5 per cent over the next 12 months and a further three per cent in the subsequent year.
First home buyers were less active in markets, as were Australian investors – although foreign financiers showed an increased interest in NSW.