Australia: Residential property market remain very uneven across states - Westpac

Analysts at Westpac, explain that after a significant slowdown in 2017, annual price growth in Sydney is poised to dip into negative for the first time in 5½ years and while most other markets are holding up better, all major states have seen price growth moderate and turnover fall to historically low levels.

Key Quotes

“With many of the factors behind the slowdown still in place – macro-prudential restrictions, weaker foreign buyer demand, stretched affordability, and a lift in new dwelling supply – and policy unlikely to provide a boost, 2018 is shaping as a critical test of the market’s resilience.”

“The Westpac Housing Consumer Sentiment Index continues to point to some stabilisation by mid-2018 although the signal is tentative. Improvement has been driven by less downbeat ‘time to buy’ assessments and improving job security, partially offset by reduced price expectations and high levels of risk aversion.”

“Importantly, both signals and performances remain very uneven across states: NSW looks set for more weakness near term with sentiment still decidedly downbeat; Vic continues to see a more moderate slowdown with sentiment pointing to some stabilisation; Qld’s market remains sluggish but looks set for a modest improvement; the long awaited recovery in WA is seeing strong positive signals from confidence but a market turn still looks to be some way off; conditions in SA remain lacklustre with activity stalling; and Tas’s ‘outlier’ boom in prices is driving a resurgence in sentiment that points to a strong rebound in activity.”