Invest
ANZ suspects house prices ‘have peaked’
The bank expects prices will fall by 6 per cent next year.
ANZ suspects house prices ‘have peaked’
House price growth across the capital cities is set to slow to 8 per cent this year before dropping by 6 per cent in 2023, the big four has predicted.
ANZ said in an update on Wednesday (16 February) that growth in the property market appears to have peaked after posting the strongest annual gains since the late 1980s.
“Higher mortgage rates, alongside macroprudential tightening, rising new listings and constrained affordability will see house price inflation moderate this year,” said ANZ senior economists Felicity Emmett and Adelaide Timbrell.
“The return of immigration and very low unemployment will be supportive factors, but eventually higher rates will trump the positive fundamentals and prices will turn lower. Lower, but not sharply lower.”
While noting that higher interest rates would likely be the main driver of market weakness over the next two years, ANZ said it did not expect house prices would fall sharply.
“After a peak-to-trough rise in house prices of over 30 per cent since late-2020, a decline of 6 per cent is quite modest, and is unlikely to feed through to sharply lower residential construction or weigh heavily on consumer spending, given very high savings rates and increased buffers,” ANZ said.
ANZ previously predicted a rise of 6 per cent for 2022 and a decline of 3.5 per cent for 2023. It is the latest major bank to revise its house price forecasts.
NAB is expecting a rise of 3 per cent in 2022 and a fall of 10 per cent in 2023, while Westpac said prices would rise 2 per cent this year before dropping 7 per cent next year, predicting a total fall of 14 per cent over two-and-a-half years.
While the big banks also vary on their predictions for the future of interest rates, ANZ currently expects the Reserve Bank to hike rates to 2 per cent by the end of next year.
“Higher rates and possible macroprudential tightening will be key themes in 2022 and 2023. But higher household savings rates give many households strong liquidity buffers coming into 2022,” said ANZ.
“Home owning households are more likely to have bigger liquid buffers, which can be drawn down if needed to service mortgages at higher interest rates. We also expect wages growth to accelerate in 2022, which will provide an offset to the impact of rate increases for many households.”
Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more
Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more
Wrapping up an eventful 2021
Listen now
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Property
HSBC forecasts 2023 house price decline of up to 10%
The firm had previously predicted a modest rise for house prices next year. ...Read more
Property
Perth house prices continue climbing to a record high
While growth may have come to an end in Sydney and Melbourne, Perth house prices are still on the rise. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
