(Australian Associated Press)
House price growth is expected to remain slow this year but rebound in 2019.
ANZ economist Jack Chambers tips national housing price growth will hit a low of 0.8 per cent in the three months to June 2018 and reach 1.9 per cent for the year, compared with 4.2 per cent for 2017.
“We do not foresee a nationwide decline in dwelling prices in the next two years, although individual cities may see annual falls,” he said.
A predicted two Reserve Bank of Australian interest rate rises would push up mortgage rates and around 200,000 dwellings currently under construction would come onto the market, fuelling the price slow down, he said.
But, Mr Chambers predicts that house price growth will recover in 2019, to 4.1 per cent.
“We are not expecting any moves from the RBA in 2019, so the drag on price growth from 2018’s hikes is likely to be short lived,” he said.
Mr Chambers said his forecasts were partly influenced by the assumption of an uptick in wages growth, with the next wage price index data due in February.
“If wage growth disappoints again, it is unlikely the RBA will have enough confidence in the economy to hike rates,” he said.
“In which case, we would expect dwelling prices to rise by more than the model predicts, because of the reduced interest rate drag.”
The latest house price figures from CoreLogic show that home values across Australia’s five major capital cities dipped over the week to January 14, but had risen close to four per cent on where they were this time last year.
Residential property values fell an average of 0.1 per cent across Sydney, Melbourne, Brisbane, Perth and Adelaide in the week, but lifted 3.9 per cent compared to the same time in 2017.
In Sydney, Brisbane, Adelaide and Perth values dropped 0.1 per cent, while Melbourne’s prices were steady.
CAPITAL CITY PRIVATE TREATY MEDIAN PRICES
Sydney – $858,750
Melbourne – $700,500
Canberra – $618,000
Brisbane – $537,500
Perth – $495,000
Darwin – $455,000
Adelaide – $450,000
Hobart – $420,000
Combined capitals – $640,095
Sydney – $650,000
Melbourne – $522,100
Canberra – $430,000
Perth – $383,750
Brisbane – $365,000
Hobart – $315,000
Adelaide – $303,500
Darwin – N/A (only nine sales)
Combined capitals – $508,363
Source: CoreLogic Property Market Indicator Summary week ending January 14, 2017.