Strongest prospects for capital growth tipped in the sub-$500,000 categories

nab released its September 2010 Quarterly Australian Residential Property Survey a bit over a week ago.

The survey is completed by an external panel of respondents comprised of Real Estate Agents/Managers (48%), Property Developers (18%), Owners/Investors (15%), Asset/Fund Managers (12%) and Valuers (7%). So it makes some interesting reading.

I've listed what I think are the highlights below:

  • The growth prospects for Australian capital city house prices at an aggregate or macro level remain weak over the next 12 months. The national house price average is tipped to rise by around 1.5% over the next 12 months.
  • By city, the strongest growth is expected in Canberra (5%), followed by Adelaide (3.3%), Sydney (2.7%), Perth (1.6%), Melbourne (1.3%) and Brisbane (0.1%).
  • Sub-$500,000 properties remain the top pick for capital growth over the next 12 months, with $2,000,000+ the weakest.
  • Respondents expect capital growth of houses to marginally outpace apartments, with lower value properties (under $500,000) expected to record the strongest growth over the next 12 months.
  • The strongest demand for both existing property and new developments is anticipated for houses (both semis and stand alone) in the inner city and middle outer suburban rings. Demand for inner city apartments is also forecast to be good.
  • Access to credit is now seen as significant a constraint on residential property purchases as rising interest rates.
  • The residential sector remains Australia’s strongest performing property sector, followed by infrastructure and office property.
  • Adelaide, Perth and Brisbane are identified as the cities with the greatest availability of rental property at present.
  • The strongest anticipated growth in rents over the next 12 months was recorded in Victoria and New South Wales – at around 3.3% in both states – compared with the national average of 2.4%. Both Western Australia and Queensland recorded expectations below 2%.

In this survey, respondents were also asked to nominate their personally preferred suburbs for investment (in the sub-$750,000 range) and the results are located on page 3 of the report.

If you would like a copy of the report, send a request to tim@propertycollectives.com.au and I will email you a copy.

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