HSBC chief economist for Australia, Paul Bloxham, says the Australian property boom is coming to an end.
In recent years, property values in Sydney and Melbourne have seen double-digit growth, but Bloxham feels this won’t be the case in 2018.
Housing price growth will slow to the low single-digits next year he says.
Bloxham told Domain that while a hard landing is possible, it would require “a negative shock from abroad and sharp rise in the unemployment rate.”
“We do not see a significant local housing imbalance and view Australia as having had a housing boom rather than having a housing bubble,” he added.
Towards the end of this year, Sydney has been trending down while Melbourne has shown itself to be more resilient.
Bloxham said that HSBC has revised down its forecasts for Sydney next year, and has increased predictions for Melbourne.
Melbourne’s market is being supported by population growth and a healthy jobs outlook.
HSBC is expecting Sydney’s growth to be between 2% – 4% and Melbourne’s to be between 7% and 9%. Construction activity is expected to remain high over the next six to nine months.