Dwelling prices in Australia are likely to fall by 10% next year with the expectations of rising cash rate.

NAB group chief economist Alan Oster said while the housing market has remained strong despite the pandemic-related disruptions, prices have risen strongly across capital cities.

“The strength in prices has been broad-based, with even the capitals experiencing the slowest growth seeing price rises well-above 10% for the year,” he said.

Over the past year, Hobart and Brisbane have led the gains, though Sydney and Adelaide have not been far behind at well over 20% through the year.

While Perth, Darwin, and Melbourne lagged in terms of growth, they still achieve gains of above 11%.

Mr Oster said two factors are likely to commence a correction in prices: affordability constraints ad rising mortgage rates.

“This would offset gains seen in early-2022, so that overall, prices end the year roughly flat,” he said.

Based on the forecast, the average growth of capital cities this year is slated to be at 2.7%, with Brisbane and Hobart still expected to lead the gains with above 4% annual growth.

“NAB continues to see the RBA beginning to normalise rates from November with the cash rate target lifted by 65 bps from 0.1% by February 2023,” Mr Oster said.

“From there we see a steady series of increases over 2023 and 2024.”

Mr Oster said that the rate hikes would see prices decline by as much as 10% annually in 2023.

The decline is projected to be apparent across all state capitals, with Sydney and Melbourne possibly recording the most substantial fall of 11.4%.

“We see this as a relatively orderly decline, and it is important to remember this correction comes after a very sharp run up in prices over the last year,” Mr Oster said.


Top Suburbs :


tuart hill


,

wentworthville


,

mayfield


,

kawana


,

westbrook


Get help with your investment property

Do you need help finding the right loan for your investment?

When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we’ll then arrange for a local mortgage broker to contact you and work out what features or types of loans are right for your needs. We’ll even help with the paperwork. Plus an appointment is free.

 

We value your privacy and treat all your information seriously – you can check out
our privacy policy here





Source link

Leave a Reply

Your email address will not be published.