Home prices in Australia’s biggest cities rose the highest and have the furthest to fall as mortgage interest rates rise faster than expected.
Sydney and Melbourne home prices could fall by 20 per cent as the Reserve Bank of Australia, which has lifted interest rates by 75 basis points in the past five weeks, moves aggressively to stifle demand andCameron Kusher, executive manager for economic research at REA Group, said the RBA is moving quicker than anticipated and predicted national dwelling prices will fall by 10 per cent to 15 per cent, and higher in Melbourne and Sydney.Fairfax Media, to reach a peak of 1.
“Given the speed at which interest rates are going to rise, we expect property prices to fall by 10 to 15 per cent and possibly even more than that.“Price falls in Sydney and Melbourne could get up to 20 per cent, maybe even a little bit more than that, depending on how quickly interest rates rise.”“At the top end you tend to have a more finite supply of buyers, particularly when the market is getting tougher,” he said.
Paul Bloxham, chief economist ANZ at HSBC, said the RBA has moved to “inflation fighting mode” and predicted the cash rate will now reach 2.10 per cent in early 2023.Advertisement
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