nab survey indicates sub $500k properties will outperform the market

On Thursday nab released their Quarterly Australian Residential Property Survey for July 2010.

The survey had a sample of 248 respondents comprised of real estate agents/managers (41%), property developers (22%), asset/fund managers (20%) and owners/investors (17%).

It makes some interesting reading. My main take outs are that:

  • Properties traditionally favoured by first home buyers ($250,000-$500,000), are expected to realise the highest percentage capital growth over the next 12 months, for both housing and apartment stock.
  • In contrast, homes and apartments over $2 million are considered the worst investment options.
  • Residential property price expectations downgraded over the next 12 months, with Melbourne price expectations moving from strongest in March qtr to weakest in June qtr. The national average now sits at +1.4% down from +5.2% recorded in the March quarter. Melbourne has seen the most notable change, leading last quarter’s expectations at +5.8% but now finishing last nationally at +0.7%. Adelaide (2.2%), Sydney (2.1%), Perth (2.0%) and Brisbane (0.8%), have all seen expectations fall over the past quarter. Canberra, whilst also having fallen from +5.1% last quarter to a current +2.9%, is now leading the way for national house price growth expectations.
  • Demand for existing property is expected to favour houses (both semis and stand alone) in the middle and outer suburban rings, closely followed by inner city detached and semi detached product. Demand for new developments mirrors these results.
  • Apartment stock is not expected to drive strong demand within the current development cycle, particularly outside of the city/CBD area.
  • In terms of rental expectations, SA and Victoria were considered the top states for rental growth over the next 6 and 12 months (between 2.3% - 2.4%), with NSW, WA and QLD expected to record 1.6% - 1.9% growth and the ACT a distant last at 0.3% growth.
  • The major constraints on new housing developments were tight credit followed by rising interest rates.
  • The major constraints in buying existing residential property were rising interest rates, followed by access to credit and level of prices.

The full report does not seem to be available online. I was forwarded it via email.

If you would like a copy email me at tim@propertycollectives.com.au and I'm happy to send through the pdf.

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