ANZ sees ‘further evidence’ of cooling property market

A combination of factors is weighing on the Australian real estate market, with ANZ flagging a continued slowdown in price growth as the industry heads into 2018.

ANZ’s latest Australian Housing Update, released on Friday (15 September), found that dwelling price growth had slowed nationally over the past three months. While prices are now 9.7 per cent higher than a year ago, this figure is down from the peak of 11.4 per cent annual growth recorded in May this year.

“Much of this slowdown appears to be caused by a retreating investor presence in the market, in line with recent regulatory changes,” the bank said.

“APRA’s further crackdown aimed at investor borrowing, particularly those with interest-only loans, has seen the investor share of total borrowing steadily decline. In turn, price growth has slowed across most capital cities and regional areas and across detached houses and the unit/apartment market.”

However, the major bank noted that the Melbourne market has recently been more resilient than the Sydney market, “perhaps reflecting an element of ‘catch-up’ after Sydney outperformed in previous years.”

ANZ believes that this broad slowdown in price growth will continue.

"We see further evidence that the housing market is cooling," the lender said. “Weaker auction results point toward slower price growth through the remainder of 2017, while tighter borrowing conditions and higher interest rates for investors are likely to weigh on growth through 2018.”

[Related: APRA limits 'extraordinarily successful']

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