NAB’s view – capital city house price expectations

The NAB view is that average capital city house price growth will cool, although remain in positive territory at 6.4 per cent through the year to end 2015.

Capital growth is expected to be led by Sydney (10 per cent), followed by Melbourne (6.2 per cent), Brisbane (3 per cent) and Adelaide (0.4 per cent). House prices in Perth are expected to fall (-2.5 per cent).

Average national house price growth is expected to moderate in 2016 to 3.8 per cent, largely reflecting NAB’s expectations for rising unemployment, sluggish household income growth, affordability concerns (especially ion Sydney and Melbourne), cost of living pressures and still significant levels of household debt.

By individual capital city, NAB expects house price growth to accelerate modestly in Brisbane (5 per cent) and Adelaide (0.5 per cent) and remain flat in Perth. In contrast, prices are expected to slow in Sydney (5 per cent) and Melbourne (3.5 per cent).