The Australian property market continues to slide. The National Australia Bank’s residential property index has pointed to weaker than expected house price growth, lower median house price growth and downward pressure on rental prices across the country.

Chief NAB Economist Alan Oster. Photo:

Chief NAB Economist Alan Oster. Photo:

Chief Economist from the NAB Group Alan Oster announced the bad news. Victoria is the only state to enjoy increased foreign investment in new properties; with Queensland suffering the largest falls.

The property index’s predictions were equally glum – with forecasts expecting the fall to continue for the next two years – New South Wales is expected to join Queensland as the biggest property losers.

Concerns about job security are set to further impact on housing affordability as buyers decide to wait longer before taking the plunge. This will translate into a cash flow problem for builders and reduce the number of new houses being produced. This depression in the building market will have impacts throughout the economy with suppliers facing a downturn in the demand for their products.

The big opportunity for the residential property market lies in foreign buyers. Where Queensland builders were selling 25% of their new homes to foreign investors that figure has dropped to 6%.

Improved marketing to overseas investors and facilitating the purchase process can turn this figure around.

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