The Australian housing market starting to cool (in parts)
Australian housing remains overvalued and this has gone hand in hand with high household debt. Our assessment is that the national property market is cooling. APRA’s measures to slow lending to property investors are clearly biting with lending to investors slowing. The Westpac-MI consumer sentiment survey shows a sharp fall in consumers’ assessment as to whether now is a good time to buy a dwelling, led by NSW. Auction clearance rates have slowed see chart below. However, this slowdown is likely to be concentrated in Sydney & Melbourne, which are likely to see price growth slow to around 5% over the year ahead. Price growth is likely to remain negative in Perth and Darwin as the mining boom continues to unwind. Hobart & Adelaide are likely to see continued moderate property growth, but Brisbane may start to pick up a bit. Nationwide price falls are unlikely until the RBA starts to raise interest rates and this is unlikely before 2017. Click the (VIEW LINK) to read more from Shane Oliver on current housing market dynamics.