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Property prices to plummet up to $144,000

A sold sticker on top of a for sale sign. Aerial view of red brick apartment property. Australian currency staked on top of each other.
Property prices are expected to plummet by next year. (Source: Getty)

Interest rate rises have reduced how much money buyers are able to borrow, and experts are predicting major falls in property prices.

This will place greater pressure on first home buyers juggling the difficult decision of when to enter the property market, financial comparison site Canstar said.

The latest house price predictions from NAB and ANZ forecast total property price falls of around 20 per cent across the capital cities by April 2023 - from their peak in April this year.


Westpac predicted a fall of 16 per cent, while Commonwealth Bank expected prices to fall around 15 per cent.

Canstar finance expert Steve Mickenbecker said the decision to buy while house prices were predicted to fall would be adding to the pressures for first home buyers and he cautioned buyers to weigh up all the risks before choosing the right time to buy.

“A move to buy too soon will see first home buyers’ equity plummet alarmingly and leave them with a large debt,” Mickenbecker said.

“Conversely, being conservative may see them miss out if price projections have been too alarmist.

“Price uncertainty is undoubtedly adding greater pressure to the decision for first home buyers, who can alleviate some of the fears by setting their own price target for buying.”

How much would prices fall?

If the 20 per cent decline in property prices came to a head, prices in Sydney could decline as much as $144,876 by Christmas 2023.

With the median house price falling from $1,053,131 to $908,255.

Prices in Melbourne could fall as much as $135,906 - bringing the median price from $774,531 to $638,625.

Those looking to buy in Brisbane would see prices drop $105,019, from $746,017 to $640,998.

In Adelaide, property prices were expected to fall $112,307 from $649,983 to $537,676.

Perth was expected to see a drop of $87,438 from $558,879 to $471,44.

Finally, property prices in Hobart were predicted to fall ​​$143,445 from $705,079 to $561,634.

A chart showing the total value of dwelling stock in Australia.
(Source: ABS)

What it means for current homeowners

Property price falls don’t just impact potential buyers but also those who already own, Mickenbecker said.

“Housing price falls too will pass and borrowers who can afford repayments can wait it out, even if it may take years before they are ahead of their buying price,” he said.

“But borrowers who aren’t able to meet their repayments and who have low equity, can’t expect generous patience from their lender.”

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