According to ANZ’s Stateometer, which examines trends across 37 economic indicators using principal component analysis, NSW’s housing market is set to withstand the threat of a pronounced downturn.
ANZ noted that despite recent house price softening, it is “confident” that dwelling values won’t “suffer significant widespread declines”.
With the exception of unit approvals, ANZ’s research cited stable house approvals, an upturn in the detached/town house segment and continued demand for new-housing construction loans.
According to the research, construction activity will “stay up”, with the pipeline of construction activity at a “record high”.
Despite acknowledging the housing market’s significant contribution to the NSW economy, ANZ does not expect housing to “become a drag” on economic growth.
ANZ also expects housing construction to continue in Victoria, but it predicts a slight moderation in growth compared to previous years. The research also reported “rapid growth” in Victoria’s semi-detached/town house segment “well above” NSW.
Moreover, ANZ noted that the Queensland housing sector “bears watching” for signs of “rising settlement risks”. It also cited a slowdown in investor lending. ANZ predicts that construction is set to ease, following a peak in apartment developments in 2018.
Further, the research reported that dwelling investment in Western Australia is also “down sharply” as a result of changing population patterns.
However, dwelling investment is strong in the nation’s capital, but according to ANZ, that strength is “past its peak”.
ANZ’s property outlook for Tasmania is positive, with the research reporting that population growth has driven significant increases in house prices, culminating in a 12.4 per cent year-on-year rise in January.
With residential building approvals dropping by 25 per cent (year-on-year) in the September quarter, and house prices falling, ANZ has maintained a negative outlook for the Northern Territory’s housing market.
[Related: ANZ records strong mortgage growth]