House prices are expected to fall further next year with an overall decline of 23% in some states between 2022 and 2023, according to National Australia Bank.
Across Australia, most capital cities except Sydney will see a sharp hit in house prices in 2023 after surging during the pandemic, the bank predicts.
Surprisingly, Hobart will suffer the biggest drop in property prices next year, with prices set to fall 16.6%, after falling 6.4% this year, NAB found.
This will cause Hobart house prices to fall dramatically by 23% in just two years, meaning up to $174,000 could be reduced from a median price of a home worth of $758,000.
However, house prices in Melbourne are expected to fall even further to 23.2% over the next two years, according to the bank’s quarterly housing market survey.
That would include 9.1% in 2022 before accelerating to 14.1% next year, slashing the price of a median three-bedroom home worth $947,000 in the city by nearly $220,000. .
Sydney is set to suffer the biggest fall in property prices this year at 12.9%, which is expected to be followed by a further 9.4% in 2023.
It will see property prices fall by 22.3% in one of Australia’s most expensive property markets, knocking $345,000 off a house that costs $1.55million.
Despite a lower than expected rate hike this month 0.25% Taking interest rates to 2.6% in October, rising interest rates are reducing the borrowing power of buyers and are the main driver of falling house prices, the NAB noted in its quarterly survey.
He predicted that rates will go up to 3.1% before being paused.
“Indeed, the two capitals most bound by accessibility constraints – Sydney and Melbourne – fell the most,” the report notes.
“To date, Sydney and Melbourne have led the declines, but prices in other capitals now also appear to have peaked. And the decline in Brisbane has accelerated.
House prices in Brisbane are expected to start falling gently by 0.8% this year before accelerating to 9.4% in 2023.
Adelaide and Perth were still expected to see property price increases this year at 9.9% and 1.5% respectively, before falling next year.
House prices in Adelaide will fall by 16.3%, while Perth will suffer a fall of 13.9% in 2023.
Buyers have also been spooked by the rising cost of the renovation which has a “quite
“significant influence” and instead means people are looking to buy fully renovated properties, the survey also found.
“Real estate professionals believe that the three most important considerations for homebuyers when deciding to buy a property are how much they are willing to borrow to buy (82%), good local amenities (60 percent) and home size (57 percent),” the report said.
There continued to be bad news for tenants but with little availability and rising rents that are soaring well above the growth in house prices.
Rents will rise 3.5% over the next 12 months and 3.8% in two years nationwide, according to the survey.
“With rents rising faster than house prices, gross yields are expected to improve, with rents outpacing prices in every state,” the report said.
Rent growth in two years is expected to be fastest in Western Australia at 5.1%, revised up from 2% at the start of the year, and 5% in the Northern Territory, followed by 4.1% in Victoria.
Property professionals in New South Wales were a bit more optimistic and now expect rents to rise 3.7% in two years, the survey added.
“Apartment rents are rising most sharply in Sydney and Melbourne – where declines have been the largest, but have also risen by more than 10% year-on-year in Brisbane and Adelaide,” he said.
#Scary #warning #house #prices #year