27/07/2022 - 15:21

Perth to resist property price plunge

27/07/2022 - 15:21

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Interest rate rises are tipped to send property prices plunging up to 15 per cent nationally over the next 18 months, but Perth is expected to buck the trend.

Perth to resist property price plunge
Perth is forecast to be among the most resilient of the capital cities, with housing price growth of between 2 per cent and 5 per cent by December.

Interest rate rises are tipped to send property prices plunging up to 15 per cent nationally over the next 18 months, according to researcher PropTrack’s latest data, but Perth is expected to buck the trend.

The REA Group researcher forecasts property prices could fall between 2 per cent and 5 per cent within the next six months and drop up to 10 per cent in 2023.

The research firm anticipates the most expensive cities, Sydney and Melbourne, to lead the fall.

But Perth is forecast to be among the most resilient of the capital cities, with housing price growth of between 2 per cent and 5 per cent by December.

In 2023, PropTrack predicts Perth’s property price growth will slow, rising only about 1 per cent, with some parts of the city to fall by 2 per cent.

The forecast is a revision of the report produced six months ago to take into account the expedited interest rate hikes that weren’t initially anticipated until 2023.

The report's release comes after the Reserve Bank of Australia indicated further interest rates hikes were likely in the coming months.

But even with a fall of up to 15 per cent over the next 18 months, house prices nationally will still be well above pre-pandemic levels, having risen 34 per cent since its onset.

PropTrack economic research director Cameron Kusher said the market had changed significantly over the past six months, with signs the rate of price growth was already slowing.

“Although price growth was already slowing pre-rate hikes, the RBA’s moves have further slowed price growth and resulted in some falls over recent months,” he said.

“National property prices have fallen 0.5 per cent from their peak in March 2022. 

“The recent run-up in prices, coupled with reducing borrowing capacities as interest rates rise, is likely to see price falls broaden and then accelerate further into 2023, with the more expensive cities expected to record the largest price falls."

With demand for regional properties also likely to slow, Mr Kusher said he expected to see price falls in those markets.

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