National Australia Bank Ltd (ASX: NAB) shares closed up 0.61% to $38.17 apiece on Friday afternoon.
It's been a strong week for the Big 4 ASX bank shares, as shown below.
Over the past five days:
- The National Australia Bank Ltd (ASX: NAB) share price rose 3.12%
- The Westpac Banking Corp (ASX: WBC) share price increased 3.05%
- The Commonwealth Bank of Australia (ASX: CBA) share price lifted 1.34%
- The ANZ Group Holdings Ltd (ASX: ANZ) share price spiked 2.78%.
By comparison, the S&P/ASX 200 Index (ASX: XJO) lifted by just 0.47% over the week.
NAB recently revised its outlook for the national housing market in 2024 and 2025.
Let's take a look.
NAB tips home value growth to slow in 2025
The NAB Economics team has upgraded its outlook for housing values and now tips a 6.7% average increase across the capital cities for 2024. The team expects growth to slow next year to an average 4.3%.
Between the capitals, it's a case of west being best — again.
NAB expects Perth to record the highest increase in home values this year, and again in 2025 (equal with Adelaide).
NAB expects the city's median dwelling value to grow by 23.1% in 2024 and 8.3% in 2025.
According to CoreLogic data, this would be on top of 15.2% growth in 2023 and 3.6% in 2022.
The median house price in Perth is currently $808,038. The median apartment price is $540,546.
Here are the official forecasts from NAB:
| NAB forecasts for dwelling values | 2024 | 2025 |
| Sydney | 5.1% | 3.7% |
| Melbourne | -0.7% | 3.7% |
| Brisbane | 12.7% | 5% |
| Adelaide | 16.8% | 8.3% |
| Perth | 23.1% | 8.3% |
| Hobart | -0.1% | 2.4% |
| Capital city average | 6.7% | 4.2% |
Check out how home values changed across the capital cities last year here.
NAB's chief economist shares his view on home prices
Alan Oster, NAB Chief Economist, said:
We continue to see very strong demand for housing continuing to outpace new supply, with completions likely to continue trending lower in the near term as the pipeline of new construction is worked through.
In the near-term, we expect the current regional pattern of growth to continue, with Perth, Brisbane and Adelaide continuing to grow more strongly than Sydney and Melbourne.
The rental market will also continue to be pressured by the demand/supply imbalance with vacancy rates still low – and therefore rents growth, while having slowed slightly, will remain strong in the near term.
What about interest rates?
Oster said the bank continued to expect a relatively soft landing for the economy.
His team predicts interest rates will remain on hold until May 2025. However, the team notes there is a chance of an earlier cut.
Once the Reserve Bank (RBA) starts cutting rates, NAB expects the cash rate to fall from 4.35% now to about 3% over the following 12 months.
After the RBA meeting earlier this month, Governor Michele Bullock told journalists at a press conference that a rate cut either in 2024 or early 2025 was unlikely.
So based on what I know today and what the Board knows today, what we can say is that a near-term reduction in the cash rate doesn't align with the Board's current thinking.
She defined the near team as "by the end of the year and the next six months".
NAB shares snapshot
NAB shares have lifted 23.2% in the year to date, while the ASX 200 has risen 5.9%.
