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The sustained increase in house prices and dwelling rents continued to support the overall market sentiment in June quarter, the latest NAB Residential Property Survey showed.
The NAB Residential Property Index has climbed to a survey high of 71 points in the second quarter of the year. The results were mixed across states and territories, but sentiment remained above average in all markets.
The Northern Territory registered the strongest housing market sentiment over the quarter, hitting 100 points. Western Australia followed with 86 points. Sentiment also remained robust in Queensland (80 points) and Tasmania (75 points).
"With the Australian economy in a much better position than expected even six months ago, a strong labour market, and low interest rates, confidence levels among property professionals remained elevated," the report said.
In terms of house prices, property professionals expect house prices to rise by 4.2% over the next 12 months. This was lower than the earlier projection of 5.1%. The Northern Territory is foreseen to have the strongest price growth over the next year at 6.1%.
On the other hand, rental expectations remained unchanged, coming from a softer outlook in the previous quarter. Overall, rents are expected to increase by 3.3% over the next year.
"With average house price growth still expected to outpace rents in the next 12 months, yields are likely to remain under downward pressure in the short-term," the report said.
