Price drop predicted for 2023: NAB

The NAB’s latest quarterly house price report reinforced its economists’ position that house prices will see an overall rise of 2.5% this year before falling back in the following 12 months.

They admit that house prices in Melbourne and Sydney have turned faster than first anticipatedbut noted that prices in the capital had been supported overall by the performance of smaller state centers.

“We expect growth to slow in Brisbane and Adelaide, before turning negative at the end of 2022, alongside falls in major capitals,” the bank’s economists said.

The latest figures have bolstered the bank’s confidence that the RBA will start raising rates steadily from June this yearraising the cash rate to 1% by the end of the year and to 1.75% by the end of 2023.

NAB economists noted that Australians appear well positioned to weather rising mortgage payments.

“Overall, household balance sheets remain healthy and the savings rate is still high, suggesting that households will be able to adjust to higher interest rates,” they said. declared.

And they called the anticipated price cuts an “orderly correction in house prices, with the economy and labor market continuing to perform well and wage growth strengthening.”

Rising rates, however, are likely to become a barrier to new housing development in all states, the bank noted. Established homebuyers will also see the equation of what they can afford change, with rising rates “impacting these buyers more than at any time in the last 10 years”.

But first-time home buyers who intend to settle into their real estate purchases already appear to be the demographic that is slipping back.

The latest NAB housing climate survey indicated that their share of total sales in new home markets fell to a two-and-a-half-year low of 29.3% in the first quarter. Sales in this segment to homeowners who already owned a property, meanwhile, slowed to 28% from 30.8% in the fourth quarter of last year.

For established homes, first-time homebuyer activity fell sharply from 35.3% in the fourth quarter of last year to 29.8% in the first quarter of 2022. The market share of others homeownership hit a seven-and-a-half-year high of 48%, up from 43.3% at the end of last year.

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Juliet Helmke

Based in Sydney, Juliet Helmke has extensive reporting and writing experience in business, technology, entertainment and the arts. She was previously an editor at the New York… Read More

Price drop predicted for 2023: NAB

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Last update: April 26, 2022

Posted: April 27, 2022