The housing market forecasts, monitored by Westpac have been updated and have shown that housing prices are expected to rise an additional 5% leading up to the end of 2021, totaling approx.27% for the year. Previous peaks in house prices in 2017-2018 are 18% and 10% lower respectively than Sydney and Melbourne’s house prices currently. Brisbane have also seen a substantial 19.9% of growth in house prices over the last 10 months, and is predicted to grow an additional 2% before the end of the year. Westpac is also expecting house prices to increase again next year by an additional 8% nationally. Westpac anticipate that this growth will take place in the first 6 months of the year, before the market begins to correct itself. With higher interest rates anticipated to take place in early 2023, affordability hitting record lows and tightening of macro-prudential policies, the market should shift into correction and stability. Whilst the market seems to have boomed despite Covid-19 restrictions and disturbances as momentum remains high, “the boom is entering trickier territory. Price momentum has held up near term, prompting us to revise up the near-term outlook for prices. However, affordability is becoming stretched and policy tightening is now in play”. Evans said.
“The combination of high levels of new building and slow population-driven demand may also weigh on some sub-markets.” Evans stated. “The slowing growth conditions were the result of higher barriers to entry for non-home owners along with fewer government incentives to enter the market.” Tim Lawless, Corelogic Research Director said.
Source: Urban Developer
“WE STILL EXPECT THE MARKET TO SLOW OVER THE COURSE OF 2022AS MACRO-PRUDENTIAL POLICY; PROSPECTS OF INCREASED RATES;AND AFFORDABILITY REACHING RECORD LOWS TRIGGERS ACORRECTION PHASE THAT WILL BEGIN IN 2023 AND IS LIKELY TOEXTEND INTO 2024,” – BILL EVANS, WESTPAC CHIEF ECONOMIST