House price growth will moderate
House price growth will be kept under control by rising stock levels, economists have claimed.
RBC Capital Markets chief economist and Australian research head Su-Lin Ong has told the Australian Financial Review a recent rise in auction activity is unlikely to be sustained.
"I wouldn't expect the kind of pick-up we've seen in the last couple of weeks to continue in spring. It probably will be reasonably solid, given you've had the rate cut, and the labour market is in OK shape. I think the supply side of the story is an important one that shouldn't be overlooked. There will be some reasonable supply,” Ong told the AFR.
CommSec chief economist Craig James echoed Ong’s sentiments, suggesting that buyers don’t expect property prices to continue rising at the same pace.
“When you think about the outlook, a domestic or foreign investor would have to be quite confident prices will hold up or rise further from here, despite the amount of supply coming on," he said. "There would be a few more doubts in buyers' minds about that,” James said.
While price rises may be set to slow, SQM Research director Louis Christopher told the AFR asking prices are still growing. He said the researcher’s figures show the asking price for Sydney houses sold by private treaty rose 1.9% over the 90 days to mid-August. This was above the 1.2% average across the nation’s capitals, the AFR said. Asking prices for Sydney units rose 2.4% over the same period, compared to 0.9% across the combined capitals.