‘Heightened expectations’ in housing market recovery: NAB

NAB’s Residential Property Survey Q3 2023 has shown strengthened confidence among property professionals in the country’s housing market recovery, hitting the highest levels in almost two years.

The major bank’s Residential Property Index confidence measure rose by 50 basis points (bps) over the third quarter, compared to 46 bps in Q2, with the two-year measure also returning a stronger result compared to the previous quarter (up from 48 bps to 54 bps).

According to NAB, both these measures recorded the highest levels in two years, sitting “well above” the long-term averages of 35 bps and 45 bps, respectively.

Across the states, housing market confidence in the next 12 months remained heightened in Northern Territory, which was up 100 bps, and Western Australia (up 89 bps), followed by South Australia moderating at 60 bps, down from 69 bps in Q2.

NSW and Victoria showed “broadly steady” levels with rises of 39 bps and 50 bps (respectively). Queensland recorded “more buoyant” levels of confidence, up 44 bps from the 33-bp rise recorded in Q2.

However, the survey found that housing market sentiment continued to diverge among the states, with Tasmania falling deeper into negative territory (down 50 bps) along with ACT (down 31 bps).

Housing market sentiment rose in Victoria (75 bps), NSW (32 bps), Queensland (42 bps) and Northern Territory (75 bps) during the September quarter, although it softened in Western Australia and South Australia (up 77 and 50 bps, respectively). Despite this, both Western Australia and South Australia continued to outperform the national average, according to the survey.

First home buyer market share slumps

The major bank’s survey also found that the overall market share of first home buyers (FHBs) in new housing markets dropped nearing an eight-year low of 30.3 per cent in the third quarter, down from 35.9 per cent in the previous corresponding period.

The number of FHB owner-occupiers fell to 20.9 per cent from 25.2 per cent in the previous corresponding period, down to its lowest share reported since the first quarter of 2017, while FHB investors fell to 9.4 per cent from 10.7 per cent.

The overall number of FHB in new housing markets is now tracking “well below” the survey average of 38.5 per cent, according to NAB.

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