Earlier this week, the Commonwealth Bank turned out to be now the most negative of the big banks when it comes to future house prices.
It now forecasts a 12% drop in prices in Sydney and Hobart and 10% in Melbourne and Canberra in 2023.
He also expects a 9 percent drop inprices and anticipates drops of 8 percent in Brisbane, Adelaide and Darwin.
Bluestone Home Loans consultant economist Dr Andrew Wilson called claims based on a sharp rise in interest rates “nonsense.”
While acknowledging that the market will weaken in 2022 – due to rising accessibility barriers and falling demand – he argued that price growth will remain.
He also reiterated that the RBA itself had outlined expectations that the cash rate should remain at current levels until 2024, based on demands for a salary increase from the central bank and targeting of the inflation.
“For wage growth to meet RBA demands for rate hike by November 2022 – the date predicted by those predicting a record price drop in 2023 – would require an unprecedented increase in revenues over the next few months,” he said.
Even so, he noted that “since 1987, the Australian capital’s real estate market has seen only three years when house prices have fallen. – 2008, 2011 and 2018. And the price cuts have been clearly modest, falling only 4.0%, 4.1% and 5.1%, respectively ”.
Another factor dampening Dr Wilson’s expectations for declines in house prices is the expectation of a rapid return to high levels of migration – which are expected to “put further upward pressure on house prices. in our still under-supplied housing markets ”.
Real estate is a type of real estate that refers to any land and its permanent improvement or accompanying structures, whether natural or man-made.