House prices are predicted to fall in Australia in 2023, according to a new ANZ

Editor's comments: 

If they call me crazy I'm probably right.

I've been buying and selling real estate in Canada, United States and for the past 17 years in Asia for over 50 years now.

You learn a lot in 50 years. 

You learn that real estate always goes up because as Will Rogers "said buy land they don't make it anymore".

But you also learn that there can be some serious downturns during the overall positive markets.

I've been through several recessions and I'm been through several real estate crashes including the one that I predicted in Hawaii 1982.

I was one of the first persons in the world to predict a major real estate crash worldwide in 2007 when I discovered news about housewives having home selling parties instead of tupperware parties.

I was also among the first to recommend buying again in places like America in 2009 when prices dropped as much a 70% in places like Las Vegas.

I've been predicting for the last several years that the Australian real estate market is going to have one of the most serious crashes in history in the near future.

It all has to do with interest rates.

The biggest catalysts for real estate markets in Australia for the last few years was from Chinese buying and the lowest interest rates in decades allowing almost everyone to qualify to buy.

They won't tell you  most of the Chinese market buyers have bailed out and in fact are in serious trouble in their own country with big developers like Evergrande almost bankrupt.

If you haven't noticed lately inflation has been rising dramatically around the world and will probably continue for 12 to 24 months.

The pressure is now on the federal banks of every country to raise interest rates to slow down inflation. 

That's their job and if they don't do it they will be chastised.

When interest rates begin to rise the amount of people looking qualified to buy properties will diminish therefore the inverse of what's been happening now. There will be diminishing demand and rising supply creating a scenario for a major downturn in Australian real prices.

Frankly I am very surprised to see in the article below that one of Australia's major banks ANZ  is actually predicting what I also am saying.

In the near future and it may take another year or two but there will be a topping of the Austrian real estate market and prices will drop dramatically.

So is not a time to panic but it's a time to start to see the future if you are buying you better be very careful to make sure itcan offer you positive cash flow, which in my guesstimate 90% properties cannot.

If you own property already Australia is time to start looking at the exit door, if it's property that you don't need.

Then you would take that money and invest in areas of the world that vastly underpriced such as Bali right now where prices  dropped as much is 20 to 50% because of COVID - 19.

Since there is no are are no loans available to foreigners the market will not fall when interest rates rise.

So simply put "Sell Austrlia and buy Bali".

You will thank me in the future for this advice from a Real estate expert with 50 years experience.

ANZ has set a date for when we can expect property prices to “roll over” but there’s a major catch for aspiring homeowners.
Alex Turner-Cohen
@AlexTurnerCohen

November 19, 2021 - 11:34AM71 comments

Sky News Business Reporter Ed Boyd says Australia's economy is bouncing back from COVID and for the property sector, that means interest rates will…

It’s here — the news we’ve all been waiting for. House prices are predicted to fall in Australia in 2023, according to a new ANZ report.

That might buoy the hopes of aspiring homeowners but there’s a major catch.

Property prices have been turbocharged by the Covid-19 pandemic and they aren’t expected to return to pre-pandemic levels.

This year, homes rose in value by more than 20 per cent and they’re tipped to rise by six per cent for 2022.

In 2023, homes in the capitals are expected to drop by around four per cent.

That’s according to ANZ economists Felicity Emmett and Adelaide Timbrell who co-authored the ‘Australia’s Housing Rolling Over’ report released late on Thursday.

However, that means that you would have been better off if you bought a home in 2019 than in 2023.

“If our forecasts pan out, housing will be 27 per cent more expensive at the end of 2023 than at the end of 2019,” Ms Timbrell warned.

Is it still possible to achieve the Australian dream of owning a home?
Yes, you just need to look outside the big cities
No, prices are insane everywhere, the dream is dead
Rising mortgage rates are dragging down prices. Source: ANZ

The new research was based around the idea that the market would soon be “rolling over” and said there are already signs of a looming “slowdown”.

It’s been an unprecedented year for the national housing market, with gains forecast to peak by November or December this year at 21 per cent – the strongest growth since the late-1980s boom.

However, the market can’t keep up for much longer.

“Affordability constraints are biting, new listings have lifted strongly, and macroprudential tightening and higher mortgage rates are set to constrain lending over the coming year,” the authors noted.

They said “interest rates will be key” in determining when exactly prices would fall away.

The interest rate is currently at 0.1 per cent and they expect they expect the RBA to “hold” this until the first half of 2023.

However, “fixed mortgage rates are already rising,” the economists pointed out.

“A faster-than-expected rise increases the risk that prices slow more than we currently expect. And vice versa.”

House lending and prices. Source: ANZ

Cities where prices will keep growing

Although prices will become sluggish next year, with just a six per cent rise, some capital cities will grow above that threshold.

Brisbane is set to jump by nine per cent, Hobart will be up by 8 per cent, and Melbourne is expected to end the year at seven per cent higher.

Sydney is sitting exactly on the average mark at six per cent by the end of next year, according to the ANZ forecast.

The other capital cities are well below that number, with Canberra at four per cent, and Adelaide, Darwin and Perth all on more measured gains of just three per cent.
Property prices are expected to peak in November or December this year.

It’s not just housing prices set to fizzle out but the construction boom is also predicted to plunge.

“We expect housing construction to grow another 15 per cent by mid-2022, before activity brought forward by government incentives starts to dry up,” stated the ANZ outlook.