Yahoo Finance Property prices to plummet 10% across Australia
Property prices are expected to drop this year, with Sydney, Brisbane and Canberra taking the biggest hits.
Australian property prices are expected to drop between 7 and 10 per cent in 2023, as interest rates continue to rise.
PropTrack’s Property Market Outlook Report forecast a decline across all capital cities, with the biggest drops expected in Sydney, Brisbane and Canberra - at 8-10 per cent.
Melbourne and Hobart are expected to have slightly smaller declines of between 7 and 10 per cent. Adelaide, Darwin and Perth are predicted to fare the best, with falls between 3 and 8 per cent.
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PropTrack director of economic research - and report author - Cameron Kusher said this was based on the cash rate rising a further 0.50 per cent this year, followed by a period of stability.
“We expect two 25-basis-point cash rate hikes from the Reserve Bank of Australia, one to be delivered today. Following this, we expect a period of interest rate stability. However, an interest rate cut late in 2023 is a very real possibility, depending on how the economy performs,” Kusher said.
“With borrowing costs continuing to rise and the subsequent reduction in borrowing capacities, property price falls are likely to continue and accelerate in 2023, with the more expensive cities likely to see the largest price falls.”
Regional markets are also expected to drop, given their strong growth, and demand is expected to slow.
But even if prices fall 10 per cent nationally, they will still be more than 18 per cent higher than pre-pandemic levels.
According to the report, which is based on realestate.com.au data, prices dropped 2.3 per cent in 2022.
Borrowing capacity takes a hit
If interest rates increase by 0.50 per cent this year, PropTrack said borrowing capacities would drop by around 30 per cent.
The Reserve Bank of Australia is expected to increase the cash rate when it meets this afternoon, with a 0.25 per cent hike widely predicted. This would bring the cash rate to 3.35 per cent - the highest it has been in more than a decade.
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