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With interest rate rises weighing on prices, a new outlook report is forecasting property price falls of between 7 and 10 per cent nationally.
That prediction comes from REA Group’s PropTrack Property Market Outlook report, which was released today.
According to the findings, price falls will be seen across all of Australia’s capital cities this year.
Sydney, Brisbane and Canberra are all set to see the greatest dips, of -8 per cent to -11 per cent.
In Melbourne, house prices could see declines of -7 per cent to -10 per cent, with the report earmarking Hobart as expectant of similar price drops.
Riding out the next 12 months with more moderate falls are Adelaide and Darwin, with both cities predicted to see minor falls of -3 per cent to -6 per cent, while Perth has been flagged for moderate drops of -5 per cent to -8 per cent.
The PropTrack report’s predictions have been made on the proviso that the cash rate will jump another 50 basis points in 2023 to 3.6 per cent from its current level of 3.1 per cent, before remaining on hold for the remainder of the year.
Report author, and PropTrack director of economic research, Cameron Kusher, said, “We’re expecting prices to decline by up to 10 per cent nationally in 2023, with greater falls expected in the larger capital cities.”
He added that demand for regional properties is also likely to slow, and “given prices have seen stronger growth in these areas than within the capital cities, we expect to see price falls in these markets too.”
The latest predictions follow the fact that prices fell by 2.3 per cent nationally in 2022.
“With prices down 4.3 per cent from their peak, a fall of up to 10 per cent this year would result in cumulative declines of close to 15 per cent since the start of the downturn,” Mr Kusher stated.
“Importantly, this fall would represent a decline of around half that of the decline in borrowing capacities and would still have national home prices sitting above their pre-pandemic levels.”
Looking nationally, the report flagged that even with -10 per cent declines, “national property prices will still be more than 18 per cent above pre-pandemic levels.”
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