






{"id":25575,"date":"2021-10-26T06:28:12","date_gmt":"2021-10-25T23:28:12","guid":{"rendered":"https:\/\/www.asiapropertyawards.com\/?p=25575"},"modified":"2021-10-25T10:34:06","modified_gmt":"2021-10-25T03:34:06","slug":"australian-economist-forecasts-property-prices-to-drop-as-much-as-5","status":"publish","type":"post","link":"https:\/\/www.asiapropertyawards.com\/en\/australian-economist-forecasts-property-prices-to-drop-as-much-as-5\/","title":{"rendered":"Australian economist forecasts property prices to drop as much as 5%"},"content":{"rendered":"<p><span data-contrast=\"auto\">Price growth is expected to slow to eight percent in 2022<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<figure id=\"attachment_25576\" aria-describedby=\"caption-attachment-25576\" style=\"width: 1000px\" class=\"wp-caption alignnone\"><img decoding=\"async\" class=\"wp-image-25576 size-full\" src=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/10\/original-79edc834-5dad-4c1e-be9a-aae6f7c3c7eb.jpeg\" alt=\"\" width=\"1000\" height=\"664\" srcset=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/10\/original-79edc834-5dad-4c1e-be9a-aae6f7c3c7eb.jpeg 1000w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/10\/original-79edc834-5dad-4c1e-be9a-aae6f7c3c7eb-400x266.jpeg 400w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/10\/original-79edc834-5dad-4c1e-be9a-aae6f7c3c7eb-600x398.jpeg 600w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/10\/original-79edc834-5dad-4c1e-be9a-aae6f7c3c7eb-768x510.jpeg 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><figcaption id=\"caption-attachment-25576\" class=\"wp-caption-text\">Australia\u2019s current cash rate is at 0.1 percent, and the RBA says it wouldn\u2019t raise rates until there was a significant increase in inflation.\u00a0OlgaKashubin\/Shutterstock<\/figcaption><\/figure>\n<p><span data-contrast=\"auto\">According to <a href=\"https:\/\/www.9news.com.au\/national\/australia-property-prices-forecast-to-dip-5-per-cent-in-2023-after-rate-rise\/d7552708-085c-41e4-9566-dcd8dd598847\" target=\"_blank\" rel=\"noopener\">9News<\/a>, an Australian top economist forecasted that Australia\u2019s property prices could drop by as much as five\u00a0percent\u00a0if interest rates were to be raised.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Bill Evans, chief economist at Westpac has\u00a0predicted that the current red-hot property market will enter a \u201ccorrection phase\u201d in 2023,\u00a0in line with the\u00a0rise in interest rates by the\u00a0Reserve Bank of Australia.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">&#8220;As for 2022, the strong momentum will continue but the pace of gains is expected to slow, levelling out over the course of next year before moving into a correction phase in 2023,&#8221;\u00a0Evans predicts.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">&#8220;We expect price growth to slow to eight percent in 2022, up from our previous forecast of five percent, with most of that increase loaded into the first half of the year.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">&#8220;We stick with our previous views that markets will move into the first year of a correction phase in 2023 as official interest rates rise, with prices forecast to retrace by five percent.&#8221;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Australia\u2019s current cash rate is at 0.1 percent, and the RBA says it wouldn\u2019t raise rates until there was a significant increase in inflation.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">A major factor that could change his forecast was property affordability, in which regulators might have to intervene\u00a0soon.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">&#8220;The wild cards are around investor activity and potential impacts from an extended period of slow population growth,&#8221;\u00a0Evans said.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">&#8220;But for now, the market has weathered the latest COVID-19 disruptions very well and price momentum has held, prompting us to revise up the near-term outlook for prices before a correction phase begins in 2023 and likely extends into 2024.&#8221;<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">According to property data firm CoreLogic, the total value of Australia\u2019s residential real estate is now worth\u00a0AUD9.1 trillion\u00a0(USD6.8 trillion)\u00a0\u2013 almost a third larger than all superannuation, the ASX and commercial real estate combined.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Moreover, housing values have surged rapidly, the fastest annual pace since June 1989 and a 17.6\u00a0percent\u00a0increase over the first nine months of 2021.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Tim Lawless, research director at CoreLogic, said,\u00a0&#8220;With housing values rising substantially faster than household incomes, raising a deposit has become more challenging for most cohorts of the market, especially first home buyers.\u201d<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><a href=\"https:\/\/www.asiapropertyawards.com\/en\/new-south-wales-aims-to-produce-110000-tonnes-of-green-hydrogen-per-year\/\" target=\"_blank\" rel=\"noopener\"><strong>More: New South Wales aims to produce 110,000 tonnes of green hydrogen per year<\/strong><\/a><\/p>\n<p><span data-contrast=\"auto\">&#8220;Sydney is a prime example where the median house value is now just over AUD1.3 million.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">&#8220;In order to raise a 20 percent deposit, the typical Sydney house buyer would need around AUD262,300. Existing home owners looking to upgrade, downsize or move home may be less impacted as they have had the benefit of equity that has accrued as housing values surged,\u201d Lawless added.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<div class=\"entry-content\">\n<div class=\"entry-content\">\n<div class=\"entry-content\">\n<div class=\"entry-content\">\n<div class=\"entry-content\">\n<div class=\"entry-content\">\n<div class=\"entry-content\">\n<div class=\"entry-content\">\n<div class=\"entry-content\">\n<div class=\"entry-content\">\n<p><em>The Property Report editors wrote this article. For more information, email:\u00a0<a href=\"mailto:propertyreport@propertyguru.com\" target=\"_blank\" rel=\"noopener\">propertyreport@propertyguru.com<\/a>.<\/em><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Price growth is expected to slow to eight percent in 2022\u00a0<\/p>\n","protected":false},"author":12,"featured_media":25576,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[92,1],"tags":[149,1339,1282,512],"class_list":["post-25575","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-property-report","tag-australia","tag-interest-rates","tag-property-prices","tag-residential","news_country-australia","news_author-property-report"],"acf":[],"yoast_head":"<!-- This site is optimized with the 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