Home owners can expect house prices to stop falling mid-year, but only after the Reserve Bank of Australia ends its fastest monetary tightening in 30 years, and they will have to wait longer before property prices start rising.
suggests a 15 per cent decline in the value of properties from top to bottom, according to the median forecaster. Only six respondents are more optimistic, predicting a smaller loss.Australian house prices jumped 22 per cent in 2021 amid record-low mortgage rates, but lost their shine after the RBA started to lift the cash rate the following year in rapid-fire increases. The central bank raised the policy rate eight times to 3.1 per cent in 2022, from near zero, to curb inflation.
Mr Oster describes the decline as a direct affordability and borrowing power adjustment to higher interest rates, rather than a response to property congestion. Stockbroking house Morgans is the survey’s most hopeful respondent. “We do not believe that house prices will fall further than the decline we have already seen,” said Michael Knox, chief economist at Morgans, noting a 5 per cent bounce in CoreLogic’s clearance rate. “This suggests that the earlier decline in house prices may be coming to an end.”
Meanwhile, IFM Investors chief economist Alex Joiner highlighted weak consumer sentiment, rising job insecurity, and falling real household incomes. “These factors alongside interest rates will keep downward pressure on prices,” he said.Bob Cunneen, chief economist at MLC Asset Management, warned about a looming “fixed fiasco” when fixed-rate mortgage loans mature in late 2023.Nearly a quarter of the $500 billion fixed-rate loans will expire this year.
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