There has been a notable increase in foreign buyer activity in the new housing market, reaching an all-time high of 13.9% of national demand.
The first quarter residential property survey report by
NAB shows foreign buyers are particularly active in Queensland, making up 24.4% of new property market demand.
In NSW foreign buyers preferred to buy established property and made up 12.7% of demand in this market.
Demand for all types of new property weakened slightly, although it is still very strong in NSW. Credit availability and housing affordability continue to be identified as the biggest impediments to buying new property, but concerns over interest rates are beginning to rise.
However, the report said first home buyers seem to be returning to the market with 21% market share, especially in Victoria (29%) and NSW (25%).
After a very strong 2013, NAB modelling indicates average capital city house prices will cool over the next two years, with the bank’s economics team forecasting average national house price growth of 5.4% through the year to March 2015 and 4.4% in the year to March 2016.
While there is sustained population growth, supply issues and foreign buying activity will put a floor under house prices, and unemployment and the economy will limit gains, NAB said.
Brisbane is expected to take the lead with a market share of 6.4% in the next year, followed by Perth (5.6%) and Sydney (5%), with slower growth forecast in Melbourne (4.3%) and Adelaide (3%).
Employment security is still identified as the biggest impediment to buying existing property in all states except NSW, where a lack of stock is seen as the biggest impediment in the market place, NAB said.
Around 310 panellists participated in the survey.
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