Unit values are tipped to drop across Australia this year.

The latest NAB Residential Property Survey predicts nationally average house prices will rise by 1.5 per cent this year, while units prices will drop by 1 per cent.

NAB Group chief economist Alan Oster tips “flat to falling prices’’ in most capital city unit markets with Perth and Melbourne expected to record the biggest drops of about 3 per cent.

Sydney and Brisbane unit prices are tipped for drops in values as well, but only by about 0.6 per cent.

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NAB’s Alan Oster said house prices will increase by 1.5 per cent this year, but units won’t fare as well.Source:News Limited

He said the drops in Perth reflected the poor economic conditions in that capital city, while in Melbourne added supply and weaker investor demand result in value drops.

Earlier this year the NAB had predicted that house prices would only increase by about 1 per cent nationally this year, but it has increased that forecast now to 1.5 per cent.

In the housing market, Brisbane and Melbourne are expected to be the best performers.

Brisbane house prices are tipped to rise by 2.6 per cent this year, while Melbourne will be close behind with increases of 2.3 per cent.

Sydney’s house price growth will slow to 1.5 per cent while in Adelaide the increase will be a marginal 0.2 per cent.

Prices are expected to drop in the Perth housing market by another 3 per cent.

Mr Oster said the results painted a “very mixed picture’’ across the country.

He said sentiment was positive in the eastern seaboard states while it was negative in other states.

The report comes as the CoreLogic TEG Rewards, market sentiment survey revealed many Australians believe the housing market is vulnerable to a substantial downturn.

Almost 70 per cent of respondents are concerned about a crash in values.

There were 61 per cent of respondents who thought now was a good time to buy compared to 71 per cent a year ago.