According to the report, Sydney’s median house price will flatline and its apartment prices will fall 6.8% by 2019. A decline will also be seen in Melbourne’s property market, while Brisbane will likely see a widely diverging picture in its house and unit prices.
“Prices are forecast to soften through the three years to 2019, which is likely to be positive for housing affordability,” Phil White, CEO of QBE Lenders’ Mortgage Insurance, told the Australian Financial Review.
“It’s expected owner-occupiers, including first home buyers, will be stepping in to pick up some of this opportunity in the market.”
The report strengthens the notion that record number of new apartment completions will push the prices lower and weaken the purchases by investors and overseas buyers.
Tighter lending to investors has led to a revival in loans to non-first home buyers, whose share of the market increased from 37% to 43%.
“It may be that with less competition from investors, owner-occupiers are stepping in to fill the gap,” the report said.
“The headwinds for foreign investors are expected to have the greatest impact on the new dwelling market, particularly the apartment sector, where substantial pre-sales are required for a project to obtain development finance for construction.”