Wesptac Bank has recently upgraded its forecast for our housing market.
Westpac now expects prices to rise 7% nationally in 2023 but the pace is expected to slow in 2024 as affordability becomes extremely stretched.
Now that's a turnaround because in April this year Westpac had forecast prices to track flat overall nationally this year, followed by a 5% lift next year.
And just 12 months ago in August 2022 Westpac has warned real estate prices in Australia’s two biggest cities could fall by as much as 18% by the end of 2023.
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- Dwelling prices are forecast to rise 7% in 2023, revised up from flat markets.
- The bank's upgrade follows continued momentum, improved near term outlook for rates and growth.
- Westpac have assessed that interest rates have peaked, and the rate easing cycle will begin in September quarter 2024.
- Affordability will constrain price gains medium term, despite rate cuts.
- Property price growth to continue in 2024 but at a more moderate 4% pace.
- Tension between undersupply and stretched prices is tightening markedly.
They are not the only bank to change their mind.
Wesptac's about face follows NAB's recent upgrade to their property market forecasts.
NAB is now predicting a rise of 4.7% in home values by the end of the year.
That's right – just 9 months they said values would fall 20% NAB now they say they’ll rise 4.7% this year and 5% next year .
By the way – many markets have already surpassed that level of growth.