The big four bank believes prices have already bottomed and will continue to rise over the remainder of 2019 and into 2020, mainly driven by price increases in Sydney and Melbourne.

NAB’s survey of over 300 property professionals for its residential property index revealed housing market sentiment among these property experts has improved.

Market sentiment improved in all states except WA which was the only state to report a negative index reading.

Sentiment lifted sharply in Victoria and was the highest in the country by some margin.

Property professionals in all states except WA expect to see positive gains in the next year, with Victoria and NSW leading the way.

property index

Source: NAB

NAB Chief Economist Alan Oster believes the results suggest Australia’s housing market is on the way to recovery.

“This marks a sharp reversal from the previous survey where Victoria and NSW were expected to be the weakest states for price growth and the only states where prices were tipped to fall,” Mr Oster said.

The survey also pointed towards an increasing (although still below average) number of investors in both the new and established housing markets.

“That said, tight credit was again called out as the single biggest constraint on new housing development, and access to credit the biggest impediment for buyers of existing property across the country,” Mr Oster said.

Overall, NAB predicts “moderate” average growth of 4.5% across all capital cities in 2020.

Units, meanwhile, are expected to grow in price by 3.9%.

“Despite the stabilisation in prices, we expect the activity side of the market to remain weak. Dwelling investment is expected to decline relatively sharply over the next few quarters – though from a high base,” NAB’s report said.

“While the pipeline of work to be done remains high, it is likely this will be quickly eroded with high rates of work done.

“Building approvals have continued to trend down, suggesting little replenishment to the flow of new work.”

NAB Hedonic House Price Forecasts (%)*

Sydney 3.4 -10 1.8 7.4
Melbourne 11.3 -9.1 0.7 7.4
Brisbane 2.5 0.4 -1.8 0.2
Adelaide 3.2 1.3 -2.2 -0.8
Perth -1.2 -4.3 -7.2 -2.0
Hobart 11.4 8.3 1.5 1.8
Capital city average 4.8 -6.7 -0.6 4.5

Source: CoreLogic, NAB Economics. *percentage changes represent through the year growth to Q4.

National house prices up 2.7% over the past three months

While the NAB index is referring mainly to future property prices, the latest House Price Report from Domain shows the median Australian house price has risen by 2.7% over the September 2019 quarter.

From their peaks to their lowest point, the national median house and median unit prices have lost almost $65,000 and $43,000 respectively in recent years, but the data supports NAB’s view of a continued upswing.

The median property price has risen to more than $770,000, while the median unit price increased by 1.8% to just under $540,000.

According to Domain’s data, this is the first national quarterly growth seen since December 2017, and like NAB says, it’s been mostly driven by buoyant Sydney and Melbourne property markets.

Median house prices

Capital citySep-19QoQYoY
Sydney $1,079,491 4.80% -1.60%
Melbourne $855,428 4.10% 0.00%
Brisbane $562,847 -1.00% -1.80%
Adelaide $538,550 -0.60% 0.70%
Canberra $738,864 -0.70% 0.60%
Perth $527,107 -1.00% -2.40%
Hobart $482,960 1.30% 2.60%
Darwin $521,651 1.00% -4.40%
National (excludes Darwin) $773,635 2.70% -1.00%
Source: Domain House Price Report

Experts have attributed these surges to:

Looking for a low variable rate home loan? The table below displays some of the lowest-rate variable home loans on the market.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
Online ExclusiveUp To $4K Cashback
5.99% p.a.
5.90% p.a.
Principal & Interest
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Ready, Set, Buy!

Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!

With bonus Q&A sheet and Crossword!

By subscribing you agree to our privacy policy