House prices may be approaching a peak

The  surge in capital city house prices may be over.

The National Australia Bank, which studies price expectations, reports that they are now subdued.

As recently as the March quarter, Australians expected capital city house prices to rise by a national average of 5.2 per cent, in the 12 months, which were then ahead.

That is now down to just 1.2 per cent, a figure the bank says reflects “significant” slippage.

Melbourne has been hit particularly hard.

The bank says residential property prices in Melbourne had shown  “very rapid growth” over the past year.

However expectations of further price rises there, over the next 12 months, had fallen from 5.8 per cent in the March quarter to just 0.7 per cent now.

Perth people now expect residential property prices, in their mineral rich city, to rise by just 2 per cent over the coming year.

Sydney people expect a 2.1 per cent rise, while those in Adelaide expect residential property prices to rise by 22. per cent and Brisbane people expect a rise of just 0.8 per cent.

In all four cases, current expectations are well down on those seen as recently as the March quarter of this year.

Canberra people, though, are still relatively optimistic about residential property prices.

Back in the March quarter, they had expected a 5.1 per cent average price rise, over the coming 12 months.

Even in the national capital, though, expectations have been trimmed.

They now expect to see a rise of just 2.9 per cent.

The bank did not publish price expectation figures for either Hobart or Darwin.

It did note, though, that residential property is currently outperforming all other property sectors.

The bank said it was doing this by quite a wide margin.

Related stories:

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2. Perth house prices lead national tumble
3. House prices take off