Home values are expected to fall across Australia, with the National Australia Bank expecting a 13 per cent drop in Perth's house prices this year.
Home values are expected to fall across Australia, with the National Australia Bank expecting a 13 per cent drop in Perth's house prices this year.
NAB today released its quarterly residential survey, forecasting Perth dwelling prices to fall by 13.1 per cent in 2023, followed by a 1.2 per cent rise the following year.
However, the bank's survey found Western Australian property professionals are expecting a 1.3 per cent rise in house prices in the next year and a 2 per cent rise over the next two years.
The survey forecast an average of 11 per cent drop in dwelling prices of Australian capital cities in 2023 but a 2.6 per cent rise in 2024.
NAB also reported its Residential Property Index fell for the third straight quarter as the downturn in the national housing prices deepened.
"New research suggests residential rental shortages will remain problematic over the next few years, with six in ten property professionals indicating it will be a 'significant' issue in their area in the next twelve months, and five in ten in two years’ time," the NAB survey said.
The survey found housing confidence for the next 12 to 24 months remained the highest in WA but eased from the previous quarterly results.
NAB Group chief economist Alan Oster said house prices continued to decline through 2023 because of the lagged impact of higher rates and the Reserve Bank of Australia continuing to lift rates earlier this year.
“Outcomes across the other cities have been mixed with Brisbane also declining solidly over the past year (with a recent acceleration in falls), but Perth and Adelaide still positive after peaking later and seeing more modest declines,” he said.
“Overall, we still see a peak to trough decline of around nineteen per cent before prices see a modest rebound in 2024.
“Importantly, we see the ongoing decline occurring in an orderly fashion with the reduction in borrowing power being the key driver, rather than a fundamental oversupply of housing.
“Indeed, underlying demand for housing looks relatively strong at present.”
Mr Oster said he could see the RBA increasing the cash rate by 25 basis points at both the February and March meetings, taking the cash rate to a peak of 3.6 per cent.
"With the lags in pass through, this is likely to continue to see adjustments in the property market through mid-to-late 2023," he said.
"More broadly, we expect the impact of higher rates to continue to flow through the economy through H1 [first half] 2023."
Recent CoreLogic data shows the median dwelling value of every capital city in Australia fell during January but Perth recorded one of the smallest declines.
The data shows the national home value index fell by 1 per cent last month with Perth's own index falling 0.3 per cent over the same period.