HSBC`s chief economist says house prices in Melbourne, Sydney, will continue to rise strongly in 2017, but the construction boom driven by apartment construction in the past five years will recede at the end of the year.
Prices will rise 3.4% in 2017 and 1.7% in 2018, according to the bank. The result is based on the Bank of Australia raising interest rates from 50 basis points to 2% in cash.
But while house prices will continue to rise, experts say the housing boom is nearing its peak, with the number of new housing approvals falling sharply in recent months and likely to enter the downlink
We predict that real estate construction will begin to slow when mining investment stops declining
Australian investment expectations should be driven by mining maintenance, infrastructure investment and business investment for exports driven by tourism and education
HSBC thinks real estate investment will give a 4.4% positive boost to GDP in 2017, compared with 9% in 2016, but will fall 5.7% in 2018.
On the rise in house prices, he thinks the prices of Melbourne stand-alone houses in Sydney will rise strongly, but Melbourne apartments may fall
Brisbane apartment prices will fall, Adelaide house prices will rise slightly, pace will continue to fall in 2017
In Melbourne, Brisbane and pace, we saw signs of oversupply of apartments, but Sydney`s apartments were still in short supply. There is no oversupply in the independent housing market
He said house prices in Brisbanad Adelaide pace have not risen much since 2012, and there may be an oversupply problem in these places compared with Sydney, which has risen 69% and continues to double-digit increases.
Melbourne is a bit complicated, with the price of independent homes rising 55%, but apartments up only 19%.
