house prices

Why Australian house prices could start to drop

PHOTO: House prices

  • House prices set to drop as property market experiences an ‘inevitable’ plateau
  • Economists predict subdued 2022 as lenders increase low fixed mortgage rates
  • Experts have forecast moderation in price growth as more homes hit the market 
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Australians looking to break into the housing market can look forward to an ‘inevitable’ slowdown in prices, driven by easing buyer demand and an increase in homes for sale.

Australians looking to break into the property market this year can look forward to a drop in house prices as the country experiences an impending slowdown (pictured, a Sydney bidder)

Australians looking to break into the property market this year can look forward to a drop in house prices as the country experiences an impending slowdown (pictured, a Sydney bidder)

Property values are estimated to climb at a much slower rate after a strong year of record growth (pictured, a Sydney property)

Property values are estimated to climb at a much slower rate after a strong year of record growth (pictured, a Sydney property)

Gareth Aird, head of Australian economics at Commonwealth Bank told the Sydney Morning Herald it was ‘inevitable’ that house prices would eventually flatline.

‘It can’t keep growing at this sort of rate. It was inevitable that we were going to see a moderation in price growth and that’s what is happening right now,’ he said.

Mr Aird predicted prices would rise by seven per cent this year.

However he warns the Reserve Bank (RBA) could start lifting rates by November – which could lead to downward pressure on prices.

This could spark a market correction of 10 per cent in 2023, he warned.

In the year to November, Sydney’s median house price climbed by 30.4 per cent to a ridiculously unaffordable $1,360,543, CoreLogic data showed.

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