Melbourne and Adelaide will be "the worst-performing markets for house price growth in 2013," according to modelling by the National Australian Bank.
While not anticipated to be in negative territory, they are expected to continue to lag behind the capital city average, with state economic conditions and employment prospects in both these states also expected to remain tougher.Click to enlarge
Despite relatively subdued credit lending overall, NAB notes the Australian housing market had shown intermittent improvement as the effects of lower interest rates, an uptick in growth in real rents and sound underlying fundamentals had supported recent improvements in house prices.
"With very accommodative monetary policy now firmly in place, another 75 bps of rate cuts pencilled in by NAB this year and a continuing shortage of dwellings, it is possible that we will see resumption in national house price growth in the years ahead," says NAB.
"However, job insecurity may act as a constraint during 2013.
"Our modelling indicates that capital city average house prices will rise by around 1½% through the year to end-2013 and 3% in the year through to end-2014, which is slightly higher than the average survey forecast."
It notes house price divergence between the states is likely to persist, with the ‘multi-speed’ nature of the Australian economy also "very apparent" across state housing markets.
Perth is tipped to lead the nation in terms of house price growth with capital gains forecast to run at around 3.5% through the year to end-2013 and 5% in the year through to end-2014, underpinned by improved affordability, population growth and above average state economic growth. Sydney (2.1% and 3.7%) and Brisbane (1.7% and 3.5%) also out-perform the national average.