Dwelling prices in Australia are likely to fall by 10% next year with the expectations of rising cash rate.<\/p>\n
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.<\/p>\n
\u201cThe strength in prices has been broad-based, with even the capitals experiencing the slowest growth seeing price rises well-above 10% for the year,\u201d he said.<\/p>\n
Over the past year, Hobart and Brisbane have led the gains, though Sydney and Adelaide<\/a> have not been far behind at well over 20% through the year.<\/p>\n While Perth<\/a>, Darwin<\/a>, and Melbourne lagged in terms of growth, they still achieve gains of above 11%.<\/p>\n Mr Oster said two factors are likely to commence a correction in prices: affordability constraints ad rising mortgage rates.<\/p>\n \u201cThis would offset gains seen in early-2022, so that overall, prices end the year roughly flat,\u201d he said.<\/p>\n 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.<\/p>\n \u201cNAB 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,\u201d Mr Oster said.<\/p>\n \u201cFrom there we see a steady series of increases over 2023 and 2024.\u201d<\/p>\n Mr Oster said that the rate hikes would see prices decline by as much as 10% annually in 2023.<\/p>\n The decline is projected to be apparent across all state capitals, with Sydney and Melbourne possibly recording the most substantial fall of 11.4%.<\/p>\n \u201cWe 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,\u201d Mr Oster said.<\/p>\n<\/p><\/div>\n
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