Australian House Prices to Fall 10 Percent in 2023 After Interest Rate Rise: Commonwealth Bank-Rebecca Zhu

The Commonwealth Bank of Australia (CBA) expects house prices to fall by around 10 percent in 2023 after the official interest rate lifts. Gareth Aird, the head of Australian economics at CBA said a further tightening of macro-prudential policy looks unlikely, and the housing market will see moderate growth over the first half of 2022. But CBA is expecting the Reserve Bank of Australia (RBA) to begin lifting the cash rate in November 2022, when house prices are expected to peak. “Dwelling prices nationally will end 2021 up by [around] 22 percent and very much in line with our call for a 20 percent increase in early August,” Aird said (pdf). “From there we expect prices to continue to rise through the first half of 2022, but at a more modest pace.  We look for prices to peak in late-2022 around 7 percent higher than end-2021 levels.  We then expect … The Commonwealth Bank of Australia (CBA) expects house prices to fall by around 10 percent in 2023 after the official interest rate lifts. Gareth Aird, the head of Australian economics at CBA said a further tightening of macro-prudential policy looks unlikely, and the housing market will see moderate growth over the first half of 2022.

Rebecca Zhu

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