Property prices are expected to rise further in 2015, making the situation even more difficult for first time home buyers, according to a new survey of prominent economists and market observers.
The finder.com.au Monthly Reserve Bank Survey of 37 market experts found that 69 per cent of those questioned think that house prices will continue to rise over the next year.
However, 14 per cent expect prices to stabilise and 17 per cent expect them to fall.
“Of the 37 experts, many raised several key issues that influenced their predictions including the need for stability, a slow economy, a weakening Australian Dollar and no unexpected movements in the past month,” said finder.com.au head of PR Michelle Hutchison.
“It was also interesting to find some experts in the survey discussing the reality of a rate cut next year, with factors that could occur such as a falling housing market and slower growth in China and other foreign economies,” she said.
The economists also offered their views of interest rates.
“Nothing has changed since the last meeting to justify a move. Property remains strong but growth remains subpar and inflation benign. While home prices are likely to keep rising in 2015 the pace of increase will likely slow, particularly in Sydney and Melbourne,” AMP Capital’s Shane Oliver said.
According to Domain Group’s Andrew Wilson there will be “No impact from any change until next year. House price growth will track around inflation depending on local demand and supply drivers,” he said.
“We still expect no change in the cash rate until the end of 2015. While there are tentative signs of an improvement in household spending, they do not yet signal a sustained change in household and business conditions. In the absence of any major surprises, the cash rate is unlikely to rise until late next year as monetary policy commences its return journey to normality.” NAB chief economist Alan Oster said.
ANZ Chief economist Warren Hogan agreed, saying that “the economy is playing out largely as expected and the level of interest rates is appropriate for the outlook for the economy.”