NAB expects house price growth to dampen

Published 10 October 2013 12:31, Updated 14 October 2013 08:20

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NAB expects house price growth to dampen

NAB predicts capital city house prices will rise 3.5 per cent in the year to September 2014 and 3 per cent to September 2015. Photo: Glenn Hunt

Bullish price growth predictions from the property industry have been watered down by the National Australia Bank, which believes employment uncertainty will stymie growth.

Property professionals tipped house prices to rise 3.3 per cent in the year ahead, 4.5 per cent in the next two, in the NAB’s quarterly industry survey.

Industry predictions came as the bank reported a 1.3 per cent increase in house prices in the third quarter, up from only 0.1 per cent in the second quarter this year.

The NAB expects unemployment to dampen growth over the next two years, which, combined with tight credit conditions, will hold back price growth.

The bank foresees capital city house prices rising 3.5 per cent in the year to September 2014 and 3 per cent to ­September 2015.

Industry sentiment was high in the third quarter thanks to national rises in prices and strong demand for all styles of housing, including an uptick in new house sales.

Read the full story at The Australian Financial Review.