{"id":1909,"date":"2022-02-17T09:03:24","date_gmt":"2022-02-17T09:03:24","guid":{"rendered":"https:\/\/royabhishek.in\/urbanbuyer\/anz-predicts-a-soft-property-landing\/"},"modified":"2022-02-17T09:03:24","modified_gmt":"2022-02-17T09:03:24","slug":"anz-predicts-a-soft-property-landing","status":"publish","type":"post","link":"https:\/\/royabhishek.in\/urbanbuyer\/anz-predicts-a-soft-property-landing\/","title":{"rendered":"ANZ predicts a soft property landing"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div>\n<div id=\"toc_container\" class=\"no_bullets\">\n<p class=\"toc_title\">Please use the menu below to navigate to any article section:<\/p>\n<\/div>\n<p><strong>Another week, another fresh take on where the housing market is going. <\/strong><\/p>\n<p>This time it\u2019s from the ANZ, which expects overall house prices in Australia to increase by 8 per cent this year, up from its earlier forecast of 6 per cent.<\/p>\n<p>However, the bank is now expecting larger house price falls across the capitals during next year as rising mortgage rates start to bite.<\/p>\n<p>There have been plenty of negative headlines about the future of our property markets, but are they right?<\/p>\n<h2><span id=\"anz-believe-house-price-growth-is-set-to-slow-in-2022-then-turn-negative-in-2023\">ANZ believe house price growth is set to slow in 2022 then turn negative in 2023<\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignright size-medium wp-image-158426 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/10\/price-falls-300x193.jpg\" alt=\"Price Falls\" width=\"300\" height=\"193\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/10\/price-falls-300x193.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/10\/price-falls-1077x692.jpg 1077w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/10\/price-falls-1536x987.jpg 1536w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/10\/price-falls-1160x745.jpg 1160w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/10\/price-falls.jpg 2000w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\"\/>ANZ believe the 20% plus gains in house prices over the past year won\u2019t be repeated in 2022.<\/p>\n<p>Higher mortgage rates, alongside macroprudential tightening, rising new listings and constrained affordability will see house price inflation moderate this year.<\/p>\n<p>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, but not sharply lower.<\/p>\n<p>ANZ expect average capital-city housing prices to rise around 8% in 2022 and to decline around 6% in 2023 (previously +6% and -3.5% respectively).<\/p>\n<p>The bank are forecasting the strongest gains in Brisbane (+16%), Adelaide (+11%), Sydney (+9%), Hobart (+9%) and Canberra (+9%) In Melbourne (+5%), Perth (+3%), and Darwin (+3%) will have more modest gains.<\/p>\n<p><a href=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/forecast.jpg\"><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-161645 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/forecast.jpg\" alt=\"Forecast\" width=\"1004\" height=\"785\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/forecast.jpg 1004w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/forecast-300x235.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/forecast-885x692.jpg 885w\" sizes=\"auto, (max-width: 1004px) 100vw, 1004px\"\/><\/a><\/p>\n<p>\u00a0<\/p>\n<h2><span id=\"house-price-growth-looks-to-have-peaked\">House price growth looks to have peaked<\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignright size-medium wp-image-157961 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/10\/median-price-300x189.jpg\" alt=\"Median Price\" width=\"300\" height=\"189\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/10\/median-price-300x189.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/10\/median-price-1101x692.jpg 1101w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/10\/median-price-1536x965.jpg 1536w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/10\/median-price-1160x729.jpg 1160w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/10\/median-price.jpg 2000w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\"\/>After the strongest annual gains since the late-1980s, ANZ forecast that house price growth will slow in 2022.<\/p>\n<p>Rising mortgage rates, tighter credit, and a large increase in stock on the market combined with reduced affordability are all set to weigh on price growth this year.<\/p>\n<p>In 2023, ANZ see prices falling modestly as higher mortgage rates start to bite.<\/p>\n<p>In the context of the 30%-plus rise in prices since October 2020, the 6% decline what they are forecasting for 2023 is a very modest correction.<\/p>\n<h2><span id=\"higher-rates-to-drive-only-a-modest-correction\">Higher rates to drive only a modest correction<\/span><\/h2>\n<p>Just as higher interest rates were the dominant factor in the strength in house prices over the past two years, ANZ believe they\u2019re likely to be the primary driver of weakness through the next two.<\/p>\n<p>The RBA is set to embark upon its first interest rate tightening cycle since 2009, and we expect the cash rate to rise to 2% by end-2023.<\/p>\n<p>But we do not expect a sharp fall in house prices.<\/p>\n<p>Cashed up households, very low unemployment, and a lift in immigration will all help to support the housing market through this period and limit the downturn in house prices.<\/p>\n<p>The flow through to the real economy is also likely to be modest.<\/p>\n<p>After a peak-to-trough rise in house prices of over 30% since late-2020, a decline of 6% 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.<\/p>\n<h2><span id=\"2022-off-to-a-solid-start\">2022 off to a solid start<\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignright size-medium wp-image-157455 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/09\/price-rise-300x225.jpg\" alt=\"Price Rise\" width=\"300\" height=\"225\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/09\/price-rise-300x225.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/09\/price-rise.jpg 800w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\"\/>Prices rose a solid 0.8% m\/m in January, although this is well down from the peak monthly growth of +2.6% m\/m recorded in March.<\/p>\n<p>The good news is that leading indicators remain positive.<\/p>\n<p>Auction clearance rates have picked up a little to the low-70s from an average of 63% in early December; housing finance for both investors and owner-occupiers turned up in October and November, and sentiment about house prices has also lifted.<\/p>\n<p>Price-performance across the capital cities continues to diverge, with Brisbane (+7.9% 3m\/3m) outstripping the larger capitals, Sydney (+2.4%) and Melbourne (+0.4%).<\/p>\n<h2><span id=\"the-turn-in-housing-finance-has-seen-house-price-growth-come-off-the-boil\">The turn in housing finance has seen house price growth come off the boil<\/span><\/h2>\n<p><a href=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/chart01-1.jpg\"><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-161631 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/chart01-1.jpg\" alt=\"Chart01\" width=\"996\" height=\"650\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/chart01-1.jpg 996w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/chart01-1-300x196.jpg 300w\" sizes=\"auto, (max-width: 996px) 100vw, 996px\"\/><\/a><\/p>\n<h2\/>\n<h2><span id=\"households-are-in-a-strong-position-to-weather-tighter-financial-conditions\">Households are in a strong position to weather tighter financial conditions<\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignright size-medium wp-image-153579 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/06\/saving-money-1-300x200.jpg\" alt=\"Saving Money\" width=\"300\" height=\"200\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/06\/saving-money-1-300x200.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/06\/saving-money-1-1038x692.jpg 1038w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/06\/saving-money-1-1536x1024.jpg 1536w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/06\/saving-money-1-1160x773.jpg 1160w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/06\/saving-money-1.jpg 1800w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\"\/>According to ANZ higher interest rates and possible macroprudential tightening will be key themes in 2022 and 2023.<\/p>\n<p>But higher household savings rates give many households strong liquidity buffers coming into 2022.<\/p>\n<p>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.<\/p>\n<p>The bank also expect wages growth to accelerate in 2022, which will provide an offset to the impact of rate increases for many households.<\/p>\n<h2><span id=\"tighter-financial-conditions-will-be-a-headwind-in-2022\">Tighter financial conditions will be a headwind in 2022<\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignright size-medium wp-image-159059 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/11\/money-management-300x225.jpg\" alt=\"Money Management\" width=\"300\" height=\"225\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/11\/money-management-300x225.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/11\/money-management.jpg 800w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\"\/>It\u2019s unlikely that the renewed uptrend in housing finance will be sustained.<\/p>\n<p>Three-year fixed-rate mortgages are up more than 100bp, and while heightened competition has driven variable rates lower, overall average lending rates are now heading higher.<\/p>\n<p>APRA\u2019s macroprudential tightening in November last year is another factor adding to tighter financial conditions.<\/p>\n<h2><span id=\"interest-rates-will-be-key\">Interest rates will be key<\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignright size-medium wp-image-131273 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2019\/03\/interest-rates2-300x200.jpg\" alt=\"Interest Rates2\" width=\"300\" height=\"200\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2019\/03\/interest-rates2-300x200.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2019\/03\/interest-rates2-1038x692.jpg 1038w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2019\/03\/interest-rates2.jpg 1160w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\"\/>The path of interest rates will be critical to developments in the housing sector.<\/p>\n<p>Higher inflation and a tightening labour market are likely to push the RBA to begin lifting the cash rate in Q3 2022.<\/p>\n<p>We expect a series of rate hikes to bring the cash rate up to 2% by the end of 2023.<\/p>\n<p>While rising immigration and cashed-up households will provide some offset, the lift in mortgage rates will slow house price growth in 2022 and turn prices down in 2023.<\/p>\n<h2><span id=\"construction-has-further-to-go\">Construction has further to go<\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"alignright size-medium wp-image-136597 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2019\/08\/Building-approvals-300x200.jpg\" alt=\"Building Approvals\" width=\"300\" height=\"200\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2019\/08\/Building-approvals-300x200.jpg 300w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2019\/08\/Building-approvals-1037x692.jpg 1037w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2019\/08\/Building-approvals-1160x774.jpg 1160w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2019\/08\/Building-approvals.jpg 2000w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\"\/>ANZ report that there\u2019s still a substantial amount of work in the housing construction pipeline, given the earlier impact of the federal HomeBuilder program and other government support schemes.<\/p>\n<p>While we continue to expect activity to slow, the recent strength in house sales and the ongoing trend higher in developer finance suggests that construction will continue to grow through 2022.<\/p>\n<p>After gains of around 10% in 2021, we expect growth to slow to around 5% this year, before declining modestly in 2023.<\/p>\n<h2\/>\n<p>As you\u2019ve often heard me say, property investing is a game of finance with some houses thrown in the middle, so it\u2019s interesting to see the ANZ commentary on the landing environment..<\/p>\n<p>After slowing down at the end of last year, owner occupiers are back in the market looking for finance to upgrade to new homes.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-161636 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/fin01.jpg\" alt=\"Fin01\" width=\"926\" height=\"607\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/fin01.jpg 926w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/fin01-300x197.jpg 300w\" sizes=\"auto, (max-width: 926px) 100vw, 926px\"\/>At the same time mini existing homeowners and investors are taking advantage of refinancing at the current low interest rates\u00a0 <img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-161637 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/fin02.jpg\" alt=\"Fin02\" width=\"889\" height=\"611\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/fin02.jpg 889w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/fin02-300x206.jpg 300w\" sizes=\"auto, (max-width: 889px) 100vw, 889px\"\/><\/p>\n<p>Last year property investors started to re-enter the market, but so far this year the number of property investors chasing finance has stabilised, as has the number of first home buyers chasing finance.<img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-161638 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/fin03.jpg\" alt=\"Fin03\" width=\"892\" height=\"595\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/fin03.jpg 892w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/fin03-300x200.jpg 300w\" sizes=\"auto, (max-width: 892px) 100vw, 892px\"\/><a href=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/fin04.jpg\"><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-161639 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/fin04.jpg\" alt=\"Fin04\" width=\"888\" height=\"584\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/fin04.jpg 888w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/fin04-300x197.jpg 300w\" sizes=\"auto, (max-width: 888px) 100vw, 888px\"\/><\/a><\/p>\n<h2\/>\n<h2><span id=\"mortgage-rates-will-continue-to-rise-through-2022-and-2023\">Mortgage rates will continue to rise through 2022 and 2023<\/span><\/h2>\n<p><a href=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort01.jpg\"><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-161632 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort01.jpg\" alt=\"Mort01\" width=\"908\" height=\"601\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort01.jpg 908w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort01-300x199.jpg 300w\" sizes=\"auto, (max-width: 908px) 100vw, 908px\"\/><\/a> <a href=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort02.jpg\"><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-161633 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort02.jpg\" alt=\"Mort02\" width=\"865\" height=\"603\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort02.jpg 865w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort02-300x209.jpg 300w\" sizes=\"auto, (max-width: 865px) 100vw, 865px\"\/><\/a> <a href=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort03.jpg\"><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-161634 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort03.jpg\" alt=\"Mort03\" width=\"886\" height=\"600\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort03.jpg 886w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort03-300x203.jpg 300w\" sizes=\"auto, (max-width: 886px) 100vw, 886px\"\/><\/a> <a href=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort04.jpg\"><img loading=\"lazy\" decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-161635 img-responsive\" src=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort04.jpg\" alt=\"Mort04\" width=\"877\" height=\"574\" srcset=\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort04.jpg 877w, https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/02\/mort04-300x196.jpg 300w\" sizes=\"auto, (max-width: 877px) 100vw, 877px\"\/><\/a><\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/propertyupdate.com.au\/anz-predicts-a-soft-property-landing\/\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] Please use the menu below to navigate to any article section: Another week, another fresh take on where the housing market is going. This time it\u2019s from the ANZ, which expects overall house prices in Australia to increase by 8 per cent this year, up from its earlier forecast of 6 per cent. However, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1910,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22,39,37,76,77,38],"tags":[],"class_list":["post-1909","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-homepage-top","category-latest","category-michael-yardney-blog","category-michael-yardneys-commentary","category-property-investment"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>ANZ predicts a soft property landing | Urban Buyer: Buyers Agent &amp; Advocates | Best Property Buyers For You<\/title>\n<meta name=\"description\" content=\"Please use the menu below to navigate to any article section: Another week, another fresh take on where the housing market is going. 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