ANZ forecasts price growth in all capital cities in 2022

The ANZ now forecasts a house price growth slowdown in 2022 and then a slight fall in 2023. The latest update from ANZ predicts house price growth will peak in November or December this year at just above 21 per cent. The ANZ senior economists, Felicity Emmett and Adelaide Timbrell titled their report Australia’s Housing Rolling Over. They note the 21 percent will be the strongest growth since the late-1980s boom. “But a slowdown is in sight, with tighter credit, rising fixed mortgage rates and a large increase in stock on the market combined with decreased affordability all set to dampen price growth in 2022. “In 2023, we see prices falling modestly as higher fixed rates really start to bite.” They expect average capital city housing prices to rise just over 6 per cent in 2022. The 2023 decline is tipped to be around 4 per cent compared to ANZ's previous forecast of a small rise in 2023. Brisbane will see the strongest house price gain in 2023 at 9%, followed by Hobart (+8%) Melbourne (+7%) and Sydney (+6%), Canberra (+4%), Adelaide (+3%) and Darwin and Perth (+3%). The report envisages a second APRA market intervention in the interest rate serviceability buffer, or a measure which targets a combination of high debt-to-income and high-LVR loans. But they suggest "the rise in fixed mortgage rates over the past few weeks may see lending slow enough to obviate the need for further macroprudential measures." While a return to immigration in 2022 will be a plus, these negatives are likely to more than offset that positive, the economists say.