House prices have improved over the past quarter but according to a NAB report, Australians can expect even faster growth in the coming months.
According to the NAB quarterly Australian Residential Property Survey, sentiment strengthened notably in the third quarter, underpinned by an acceleration in house price growth in all states except WA.
“The survey is pointing to faster price growth ahead (led by NSW and Queensland), but gains are expected to be relatively modest,” the report said.
According to NAB, national house prices rose 1.3 per cent in the third quarter, with capital values showing the biggest increase in NSW (1.9 per cent) and Victoria (1.5 per cent).
The survey also suggests that property professionals are more optimistic in regards to future house price growth. 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.
Rental growth across the country sat at 0.2 per cent, falling further behind capital growth rates and leaving investors with eroding yields for their properties.
According to the survey, owner occupiers pounced at the opportunity, with a big jump in demand during the third quarter.
“First home buyers retreated from the market, with demand from Australian investors also slightly lower,” the report stated.
Capital growth expectations over the next 12 months improved at all price points for established houses and apartments, although the top end of the market is expected to languish behind more affordable housing.