Author: Megan Neil – 4 Feb 2022
Source: NAB Predicts Housing Price Growth Will Slow to Just 3% This Year (realestate.com.au)
Australian housing prices could rise by as little as 3% this year before falling in 2023, one of the major banks predicts.
National Australia Bank economists on Friday revised down their dwelling price forecasts, predicting the turning point in property prices will occur in the second half of this year.
They now expect dwelling prices will rise around 3% in 2022 before declining by around 10% in 2023, which NAB chief economist Alan Oster said would be a relatively orderly decline after a very sharp run up in prices over the last year.
"We have brought forward the timing of the correction we expect in house prices to late 2022 as affordability constraints begin to bite and rising mortgage rates place downward pressure on prices," Mr Oster said.
"This would offset gains seen in early 2022, so that overall, prices end the year roughly flat," Mr Oster said.
"We see this trend continuing through 2023, ending the year around 10% lower."
Mr Oster said NAB expected this pattern to be evident across the capital cities, although larger declines would occur in Sydney and Melbourne while Brisbane and Adelaide would see less significant falls.
NAB economists now expect the first rate hike from the Reserve Bank of Australia will occur in November, with Mr Oster saying there would be a steady series of hikes coming through 2023 and 2024.
The latest NAB Residential Property Survey report, released on Friday, forecast capital city average dwelling prices to rise by 2.7% in 2022, down from its October prediction of 4.9%.
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