The national growth in house prices is tipped to hit 4.4 per cent by the end of 2015, before slowing next year.
The National Australia Bank’s quarterly residential property survey predicts Sydney will lead the charge with house price growth of 7.7 per cent by the end of this year.
Following behind will be Melbourne (6.2 per cent), Brisbane (3.8 per cent), Perth 0.7 per cent) and Adelaide (0.4 per cent), the NAB forecasts.
But looking 12 months ahead, the bank predicts national growth in house prices of 2.1 per cent, led by NSW and Queensland, both with 3.3 per cent.
The outlook for the year is mixed, with rises expected to be contained to 1.3 per cent in Victoria, flat in West Australia and a loss of 0.4 per cent in South Australia and the Northern Territory.
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NAB group chief economist Alan Oster said Sydney and Melbourne property price rises would start to slow the following year, but Brisbane’s would accelerate.
“Average national house price growth is expected to moderate in 2016 to 3.4 per cent, largely reflecting our forecasts for rising unemployment, sluggish household income growth, affordability concerns — especially in Sydney and Melbourne, cost of living pressures and still high levels of household debt,” he said.
The report found an increasing proportion of foreign buyers, reaching 21 per cent in NSW but falling in Victoria from 33 per cent to 20.7 per cent in the quarter.
First-timers account for one quarter of all property sales, with 15 per cent being owner-occupiers and 10 per cent being investors, the NAB reports says.
A separate report from the Housing Industry Australia found residential land sales fell 11.8 per cent in the last quarter of last year.
However land value increased 6.3 per cent in the year, with Sydney, Melbourne and Perth recording significant rises.
HIA chief economist Harley Dale said there was insufficient “shovel-ready land” in some markets, which was putting pressure on prices.
-- with AAP
This article was first published on The Australian Business Review