Housing market expected to cool heading into 2015

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In a tough economic year for the Federal Government, one of the year’s brighter spots has been the strong housing market. 

In fact, it’s been two-and-a-half years of rising prices, but it seems the property market could be running out of steam somewhat. 

To the careful observer, the steam has actually slowly been escaping from the housing market as 2014 went on and there has been a trend towards a slower growth rate all year.

Sydney and Melbourne have led the way respectively, and although CoreLogic RP Data predict them to experience growth again in 2015, they are forecasting it to be at a slower rate than 2014. The smaller cities of Adelaide, Brisbane and Hobart look set to be bigger players in 2015.

Investors and upgraders were the biggest drivers of housing demand this year and while upgrader activity has slowed, investor activity continues to escalate. 

This has got the Reserve Bank watching closely and banking regulators will be making moves to clamp down on risky lending first thing in the new year. Taking some heat out of the property market by doing this could make it easier for the RBA to cut rates again if the economy continues to stall and unemployment stays on the up.


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