The NAB Quarterly Australian Residential Property Survey provides evidence to those looking at investing in property that the market is expected to remain steady throughout 2016. The Survey, first introduced in 2010, consists of a questionnaire provided to an external panel of 270 respondents, made up of property developers, owners, investors, real estate agents and managers, and asset or fund managers.
Overall the survey found that sentiment in the industry in Q1 2016 had lifted for the first time in three quarters, rising by +6 points, up from +1 in Q5 2015. Sentiment lifted in all states in Australia except in Western Australia, with NSW and Victoria leading the way. This increase in market sentiment is also reflected in NAB’s forecast for house prices nationally, which has been increased to 1.5%.
Demand For Inner City Apartments
The survey found that industry professionals expect demand for new property in the coming year will remain strong, with demand for apartments in the CBD in Sydney listed as “very good” and “fair” in the CBD of Melbourne. High rise apartments in the outer and middle ring around the capital cities are generally listed as “fair” in all capital cities.
House Prices To Remain Steady
The survey recorded that participants believed house prices would remain largely unchanged from the last quarter in 2015, with an average increase of 0.7% over the next two years.
Rental Prices To Grow In NSW
Increases in rents had softened slightly, although there was a belief that rents would increase in NSW by 1.1%, with Victoria expected to provide the best income returns of 2.1% over the next two years.
Investors Prominent In The Market
The survey also found that local investors were accounting for more of the sales of new and established properties – almost 1 in every 4 new property sales and 1 in 5 of established sales on a national level.
Foreign investors accounted for over 15% of the demand for new apartments, a slight fall from almost 18% recorded in Q4 2015, and 12.2% of brand new houses. It is interesting to look at the value of the properties most foreign investors are targeting, with 4 in 10 properties being worth $500,000 to 1 million, and 3 in 10 being valued at under $500,000.
The message to anyone looking at investing in property is that the property market in 2016/2017 is expected to remain relatively steady, with some markets (especially in NSW and Victoria) recording growth. Keeping an eye on data such as the NAB Quarterly Australian Residential Property Survey can help you tap into what industry professionals are thinking, giving you an invaluable insight into the market and its movements over the coming year.