Property prices expected to slow as heat comes out of market: AMP Capital

Property prices expected to slow as heat comes out of market: AMP Capital
Property prices expected to slow as heat comes out of market: AMP Capital

Residential property price growth is expected to slow as the heat comes out of the Sydney and Melbourne markets, according to AMP Capital’s latest market update.

Meanwhile, the search for yields amid poor returns from cash and bank deposits is expected to continue to benefit unlisted commercial property and infrastructure, at least in the near term.

AMP Capital chief economist Shane Oliver also noted that while Australian consumers remain sceptical about shares as the “wisest place for their savings” their interest in superannuation has picked up, likely in response to recent super reforms which allow for large one-off contributions before the financial year ends on June 30. 

Something similar was seen in a decade earlier in 2007, he said.

He also said that even amid the scepticism around real estate that has been around for more than a year now, prices haven’t stopped growing in Sydney and Melbourne’s property markets.

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Property prices expected to slow as heat comes out of market: AMP Capital

The recent strength in jobs data, consistent with forward-looking labour market indicators, along with solid business conditions partly offset other recent more negative data such as falling consumer confidence and poor wages growth. 

“The jobs data and the NAB survey support the RBA in leaving interest rates on hold for now,” Oliver said. 

“But given softer data for growth, consumer spending, housing construction, non-mining investment and wages growth, our view remains that there is more risk of another rate cut than a rate hike in the next 12 months or so. “

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Amp Capital Housing Market

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