Sydney home prices down 12% from peak: NAB

Sydney home prices down 12% from peak: NAB
Sydney home prices down 12% from peak: NAB

Cooling in the housing market led by Sydney and Melbourne has now been ongoing for 18 months, but the decline in prices have accelerated towards the back end of 2018, according to the NAB Forward View Report.

The report noted, fall in prices has also been reflected in the activity side of the housing market with turnover falling and clearance rates remaining low.

Investment in dwellings was primarily held at a consistent level by alterations and additions.

Sydney home prices down 12% from peak: NAB

NAB forecast the downturn in the construction cycle to continue over the next two years.

Sydney prices are now 12% below their July 2017 peak and Melbourne has declined by 9% since November 2017.

The report writers stated, "prices in Perth have weakened again recently after showing some signs of stabilisation in mid-2018."

"The other capitals have held up better (likely less effected by developments in the investor segment of the market)."

"We see peak-to-trough declines of around 15% in both Sydney and Melbourne but acknowledge that based on current momentum the declines may be larger, particularly in Sydney."

Sydney home prices down 12% from peak: NAB

Housing credit growth has also continued slowing, more so for investors than owner-occupiers.

Approvals for new building have declined and are now levels last seen in 2012, with the sharpest declines in apartment approvals.

Sydney home prices down 12% from peak: NAB

The report stated, "We expect house prices to decline further, in an orderly fashion, and housing activity indicators to show further weakness as the market continues to adjust."

"Our forecasts embody a relatively sharp slowdown in dwelling investment with a fall approaching 20% over the next two years."

"This is consistent with further weakness in building approvals and a relatively sharp downturn in the construction cycle."

NAB forecasts house prices to decline further over 2019 before levelling out in 2020.

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Nab 2019 Property Price Forecast

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