Volatility in the global economy has never been greater and forecasting never more challenging. Against this background, QBE LMI is cautiously optimistic about the outlook for the Australian housing market.
The resilience of the Australian economy since the Global Financial Crisis (GFC) can primarily be attributed to the strength of the resource and private sector which should continue to grow, as demand from Asia is expected to continue for sometime. While the housing market has certainly slowed, BIS Shrapnel’s research shows that the conditions for a significant correction over the forecast period to 2014 are just not there.
First home buyer demand, which collapsed in 2010/11, is now forecast to enter a recovery phase in 2012 as buyer confidence slowly improves. This is supported by lower house price growth and interest rates remaining at current levels, which will improve home affordability.
The Australian economy and housing market have demonstrated their resilience to deal with such events. Australia is well placed to deal with any uncertainty that our economy or housing market faces in the next few years.