“We expect a national house price drop of 11.5%, from peak to trough, and we expect that trough to be reached in the second half of (2023),” Kilroy says, adding that the BIS Oxford Economics forecasts are “at the lower end of the scale compared to some commentators”.
However, the same declines will not be experienced worldwide.
“We are forecasting a 13% drop for houses and 8% for units, and we predict that Sydney will have the biggest drop in house prices of around 18%, while we have houses in Perth at the other end of the scale with a more modest drop of 4%.”
While CoreLogic doesn’t make forecasts, Owen says the big four banks are tipping combined capital prices to fall by an average of 16%. “According to forecasts, this could be one of the biggest housing market declines we have seen, but it is also due to one of the biggest rebounds we have seen in the Australian housing market.”
However, by the end of April, ANZ had updated its forecast, downgrading its prediction of a peak-to-trough drop from 16% to 10%. In May, the big four were released. revisions to their previous house price predictions, renouncing his previously pessimistic opinions.
Sector economist Dr Nicola Powell said: were signs that the bottom had been reached, and bank recoveries could be a strong indicator.
“This could well be the bottom of the market, but we need another couple of quarters of lateral price movement, or slight improvements, before that is confirmed,” he said.
Whether this is the bottom or the beginning of another boom remains to be seen and, like economists, banks are divided: CBA predicts prices will rise 3% in 2023; NAB expects a slight drop in the year; ANZ and Westpac say the market will remain broadly stable for the rest of the year.