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Nab predicts big house price rises 2017-2018

Hi there,This week Best Bit has been an article from NAB.

Why? Because it is conservative and non-sensationalist. It’s not bad although talks National figures without explaining much about the individual status of the states.

Have a read and I will break down the points made.

  1. Interest rates may only creep up . 05% over the next 2 years
    1. Easy to see when banks long term fixed rates are so low. They don’t gamble but expect us to panic and lock in rates so their fixed rate is usually higher than what they expect variable rates to go
  2. (National) House prices up 7.2% in 2018 and 3.4% in 2019 (remember, Sydney is NOT the rest of Australia but the pundits talk like it is)
    1. Detail is that Sydney is still growing but is extremely likely to flatten out in 2018 and possible go negative in 2019 if it does push too far for too long (that is Sydney’s history). My personal prediction is that Sydney rise 15% this next 12 months and then reduce by 5% the following year in a correction
    2. Melbourne grows 10-15%, Hobart up slightly, Perth negative, Adelaide small rise and Brisbane around 5%-10%
  3. Apartment prices up maybe 6%. This is a real tricky one. Apartment price stats are highly influenced by the cost of NEW apartments rather indicative of rising prices of the old. We know that Brisbane has thousands of apartment over supply as does Melbourne but demand in Sydney will fuel an overall positive result.

Efforts by govt to open up housing investment or simply build accommodation themselves is a must economically in my opinion. The moves to make investment more difficult will only increase the biggest problem of all – a National Housing Shortage, the real reason prices are going to keep rising.
If the Govt moves are to reduce housing investment, it will increase investment into the stock market which will be great for their corporate mates but not actually help the rising cost of housing.

If you are investing in Property, good on you!
You are providing rental accommodation options to help house the increase of 400 000 people per year in Australia.

As always, I am happy for you thoughts on this so please feel free to write back to me

Warm Regards


Mike Harvey
Principal Investment Consultant and Author
 0400 098 755