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CBA, daha hızlı ve daha yüksek oran artışları nedeniyle konut fiyatlarında %15 düşüş öngörüyor


Australia’s biggest lender expects a 15% fall in home prices nationally over the next 18 months on the back of faster and higher interest rate hikes, predicting big declines in Sydney and Melbourne this year.

Commonwealth Bank of Australia economists are now forecasting significant falls in property prices as the Reserve Bank of Australia undertakes a “more aggressive” interest rate tightening cycle.

CBA head of Australian economics Gareth Aird said home prices will move lower from here given the RBA is expected to tighten monetary policy via rate hikes quickly, with the cash rate forecast to reach 2.1% by the end of 2022.

“Based on our updated forecast for the cash rate we expect home price falls nationally of around 15% over the next 18 months,” Mr Aird said.

“Prices in Sydney and Melbourne are anticipated to decline by more than the other capital cities.”

Aerial photo of houses and apartment buildings in a Sydney suburb on the Parramatta River.

CBA economists now expect home price falls of about 15% nationally over the next 18 months, with prices in Sydney and Melbourne to fall by more than the other capital cities. Picture: Getty

The decline of about 15% by the end of 2023 represents a peak-to-trough fall, with CBA noting national dwelling prices peaked in April.

Mr Aird said the expected falls in home prices are significant, but added context is key.

“Price gains in 2021 nationally were extraordinary. And therefore a contraction in dwelling prices is a natural response to rising interest rates given it was record low interest rates that drove the phenomenal lift in prices in 2021.”

PropTrack director of economic research Cameron Kusher also believes the RBA will take interest rates higher and quicker than originally expected as it tackles inflation, leading to larger falls in property prices.

Mr Kusher now expects the cash rate will reach about 2% by the end of the year, which will reduce borrowing capacities and lead to price falls.

“We think there’s going to be larger falls in property prices because of how aggressively the Reserve Bank is going to take interest rates higher,” he said.

“By the end of next year, given these interest rate increases, property prices nationally will be probably down 10% to 15%,” Mr Kusher said.

“But markets like Sydney and Melbourne would be susceptible to larger price falls than that national level. That could get up to around a 20% fall in one or both of those cities.”

Due to their expectations of a faster and higher RBA tightening cycle, the CBA economists now forecast a 6% decline in national dwelling prices this year and an 8% drop in 2023.

The CBA team, who also downgraded their economic growth and household consumption forecasts, said dwelling prices are anticipated to stabilise in late 2023.

Two-speed property market continues

Reflecting the two-speed housing market, CBA is predicting bigger price falls in Sydney and Melbourne, where home prices have already declined in recent months.

The CBA economists expect Sydney home prices to fall by 11% this year and Melbourne prices by 10%. Prices are then expected to decline by 7% in Sydney and 8% in Melbourne in 2023, taking the total falls in both cities over the two years to 18%.

The outperforming capitals of Brisbane and Adelaide are expected to record dwelling price growth of 6% over 2022.

But CBA predicts falls in both capitals next year, tipping declines of 10% in Brisbane and 11% in Adelaide.

An aerial view of Brisbane city, with the Brisbane river running through the city.

The Brisbane and Adelaide housing markets have been home price growth standouts among the capital cities, but may also face price falls next year. Picture: Getty

CBA’s forecasts have dwelling prices in Perth up 2% this year but dropping by 8% in 2023. Both Hobart and Canberra are expected to have 4% declines in 2022 plus 9% falls next year.

CBA previously expected “an orderly correction” in national dwelling prices with a broadly flat outcome in 2022 before a fall of about 8-10% next year.

It changed its forecasts after the RBA board surprised with a super-sized 50 basis point hike – the biggest in 22 years – on Tuesday that took the cash rate to 0.85%.

AMP economists still expect the cash rate to reach 1.5-2% by year-end and peak at 2-2.5% by mid-2023 and that home prices will record a top-to-bottom fall of 10-15%.

“We continue to see average home prices falling 10-15% over the next 18 months but this may now occur earlier and faster than previously expected,” AMP chief economist Shane Oliver said.

Even with big falls prices will still be higher than pre-COVID

Mr Aird said the extent to which home prices contract will depend in large part on the speed and magnitude at which the RBA lifts the cash rate.

“It could be the case that movements in home prices will feed into the RBA’s policy deliberations if prices slide too quickly,” he added.

PropTrack analysis released this week showed home prices have recorded the most rapid slowdown in more than 30 years in anticipation of a series of interest rate hikes.

But it followed the exceptional price growth in 2021, which marked the third fastest period of home price growth in Australia’s history.

Aerial view of houses in Armadale, looking towards the Melbourne city skyline.

While home price growth has slowed down at the most rapid pace in more than 30 years, prices nationally are still up 35% since the start of the pandemic. Picture: Getty

Mr Kusher said the RBA’s interest rate cuts in 2020, which took the cash rate to a record low 0.1%, led to property prices increasing dramatically.

He said property prices nationally increased by 35.3% between March 2020 and May 2022, with restrictions on how people could spend and COVID lockdowns also meaning they dedicated more of their income to housing.

Even if home prices fall as much as predicted, they will still be higher than at the start of the pandemic.

“Nationally prices are up 35.3% through the pandemic and they would have to fall about 26% just to get back to where we were at pre-pandemic levels,” Mr Kusher said.

“Even if it stretched to a 20% fall, prices would still be higher than they were at the beginning of the pandemic.”

Mr Kusher said the slowdown will also likely impact regional markets which have outperformed during the pandemic, expecting the push to regional areas won’t be as strong going forward.

“We know that a lot of people bought second homes in regional markets and the regional areas might start to see larger falls as well, just because you’ve got people that have second homes that maybe get into financial strife and have to sell those off.

“But also you’re not going to have as many people looking to buy in these regional areas as you have over the last couple of years as well.”

But Mr Kusher did not expect the rate hikes to lead to a surge in mortgage stress, given borrowers were assessed on their ability to repay a mortgage at a much higher interest rate than they got on the loan.

“We’re not expecting a surge in mortgage stress and mortgage delinquency.

“But there’s always some people, particularly when interest rates are expected to rise so quickly and the Reserve Bank was telling people that rates probably wouldn’t rise until 2024, that will get caught out by this.”

Further rate hikes on the way

Economists at CBA, Westpac and National Australia Bank now expect the cash rate to reach 2.1% by the end of the year as the RBA steps up the pace of its rate hikes to fight soaring inflation.

CBA and Westpac predict there will be another 50 basis point rise in July, while NAB economists are tipping additional 50 basis point rises in both July and August.

Mr Aird pointed out there is a risk of the cash rate reaching 2.35% at year-end, which could occur with a 50 basis point hike in August.

A home behind trees and a picket fence in the Melbourne suburb of Hawthorn

The Reserve Bank is tipped to deliver another super-sized rate hike in July and/or August after lifting the cash rate by 50 basis points in June. Picture: Eugene Hyland

He said CBA did not expect any further rate hikes in 2023, flagging the possibility of cuts.

“With the RBA now expected to take the cash rate to a contractionary setting we have pencilled in rate cuts for the second half of 2023,” Mr Aird said.

Mr Kusher also believed rate cuts were possible, after a series of aggressive hikes.

“If they’re going to be very aggressive in lifting interest rates we could end up seeing that they lift them too high and the economy slows too much, that late 2023 or early 2024 they are looking at reducing rates again.”

ANZ economists on Friday predicted the cash rate will hit 2.35% by November, the bottom half of what the RBA considers to be the neutral range, and that it will ultimately go above 3% in late 2023 or early 2024.

ANZ head of Australian economics David Plank expects the RBA will deliver a 50 basis point hike in July, with a series of smaller moves of 25 basis points including in August.

“We don’t rule out a third consecutive 50 basis point move, but we expect the RBA will ease off the size of rate hikes after July as it moves away from emergency settings,” Mr Plank said.

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  • Kaynak: https://www.realestate.com.au/news/cba-predicts-15-home-price-drop-due-to-faster-and-higher-rate-hikes/

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