Australians are less optimistic about a recovery in the nation’s housing market as a slowing economy saps confidence, a National Australia Bank Ltd. (NAB) survey showed.
Home prices across the country are expected to rise by 1.4 percent in the 12 months to June 2014, compared with previous expectations for an increase of 2.2 percent, the survey of about 300 real estate agents, developers, property owners and asset managers showed. Rents will climb by 1.5 percent across the country in the next year, down from an earlier forecast of 2.6 percent, according to the report.
House and apartment prices rose 0.2 percent in the three months to June 30 in the nation’s state and territory capitals, after climbing 2.8 percent in the first quarter, the RP Data-Rismark home value index showed. Consumer confidence in July was little changed as the Reserve Bank of Australia’s record-low 2.75 percent benchmark rate had limited impact on an economy transitioning from mining to other industries as resources investment peaks.
“National house prices appear to have taken a backward step in the second quarter,” Alan Oster, chief economist at NAB, wrote in the report. “Longer-term confidence has also been undermined by the softening economy and the downside risks being posed by the economy’s structural adjustment.”
The NAB residential property index, based on the survey, peaked in the first quarter of 2013 at 35 before slipping to 15 in the most recent period. It is forecast to climb to 29 by the end of this year and to 60 by the second quarter of 2015, according to NAB.
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