Sydney's housing boom is coming to an end as restrictions on loans to property investors and a raft of new property developments combine to depress prices, insurance giant QBE says.
After surging 56 per cent in the past four years, the median house price in Sydney will remain broadly flat in the next three years, QBE said in its annual housing outlook released on Thursday. Sydney apartment prices are seen falling 6.8 per cent by June 2019, as slowing growth in rents and unit prices damps investor appetite.
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The watched housing pot is nonetheless bubbling
Some folk have gone so far as claiming the housing market is cooling. Well, trying telling that to the people in the pot, who would most obviously be Sydney and Melbourne first home buyers.
The unprecedented housing boom has been fuelled by the RBA's record-low interest rates, a growing population and a shortage of supply, locking young people seeking to buy homes out of the market. The big banks have tightened lending standards for property investors after pressure from regulators to avert a bubble, and some state governments have imposed stamp duty surcharges on overseas buyers.
In light of these developments, "prices are forecast to soften through the three years to 2019, which is likely to be positive for housing affordability," said Phil White, chief executive officer of QBE Lenders' Mortgage Insurance.
"It's expected owner-occupiers, including first home buyers, will be stepping in to pick up some of this opportunity in the market."
The boom is also coming to an end in Melbourne, where the median home price has risen by a third over the past four years, the report said. House prices will fall 0.6 per cent by June 2019, and apartment prices by 9 per cent, QBE said.
![](http://web.archive.org./web/20161220094156im_/http://www.smh.com.au/cqstatic/12z7v7/qbe1.png)
In Perth, which has been hardest hit hard by the decline in mining investment, the median house price by 2019 is forecast to be 10 per cent below its 2014 peak.
![Sydney house prices are poised to go sideways for the next three years, QBE says.](/web/20161220094156im_/http://www.theage.com.au/content/dam/images/g/r/1/q/f/q/image.related.articleLeadwide.620x349.gs13d6.png/1476314533096.jpg)
Brisbane home prices are seen bucking the trend, with QBE saying a lack of new supply will push prices up 6.5 per cent.
Despite the lacklustre outlook, there's no evidence that the good times for home owners are ending just yet. House prices in Sydney have gained 14 per cent this year through September, compared with 9 per cent across the nation's major cities, according to CoreLogic amid a lack of houses for sale in and around the city.
Fewer investors are entering the market after banks tightened lending to landlords, the QBE report said. Property investors - as opposed to owner occupiers - accounted for 44 per cent of residential loans in the 12 months ended June 2016, down from 51 per cent the previous year, QBE said.
However, separate data released on Wednesday suggested investor interest isn't waning yet. Investor lending has rebounded 10 per cent since April, having slumped 18.5 percent over the previous 12 months, CoreLogic said.
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