A downturn in Australia's house prices may be bottoming out, with prices likely to fall slightly this year then rise by March 2014 due to strong demand for inner city houses and a healthy market in mining state Western Australia, a survey said.
The quarterly residential survey by National Australia Bank released on Wednesday showed house prices nationwide are expected to fall 0.2 percent over the next year but grow 1.6 percent in the year to March 2014.
"Basically what it's saying is that things are flattening out," said Alan Oster, group chief economist at NAB. "They are expecting that house prices, it's still falling, but soon will start to rise particularly in Western Australian and New South Wales."
Oster said demand for affordable houses remained solid.
Australia's residential sector has been ranked as one of the least affordable markets in the world but weak consumer sentiment and tight credit have put the sector under pressure.
The median price for houses and apartments in major cities stood at A$450,000 ($461,900) in December, according to research firm RP Data.
In the year ended in March house prices fell 1.3 percent, according to Wednesday's survey, covering about 300 real estate agents, developers, fund managers and home owners.
House prices in Western Australia fell 0.1 percent over the past year but are expected to turn positive by September and to grow 3.4 percent in the year to March 2014, it showed.
Likewise, New South Wales is expected to see house prices start to rise later this year, according to the survey.
Separately, government data showed new home loans slipped for a second straight month in February. A typical home loan is around A$300,000 ($308,000), while Australia's household savings ratio is over 9 percent. ($1 = 0.9741 Australian dollars) (Reporting by Eriko Amaha; Editing by Michael Watson)
