New report predicts housing prices to dip across the country including in Perth

Three major cities will be hit with plunging property prices in 2023, as higher interest rates bite.

PropTrack’s biannual Property Market Value Report, released on Tuesday, shows Sydney, Brisbane and Canberra home values will plummet 8 to 11 per cent this year, following an overall 2.3 per cent decline in 2022.

Melbourne and Hobart fare a little better. They are only predicted to fall seven to 10 per cent in the same period, while Adelaide, Darwin and Perth hold up the best with falls of only three and eight per cent predicted.

The falls are predicated on the official cash rate rising a further 50 basis points in February and March to 3.6 per cent from its current 3.1 per cent, and holding there for the remainder of 2023.

That would result in borrowing capability crashing about 30 per cent.

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The Reserve Bank will announce its decision after a board meeting on Tuesday. Banks are expected to swiftly pass on the rise to mortgage holders.

But even with property price falls of up to 10 per cent, prices are staying about 18 per cent above where they were at pre-Covid.

PropTrack’s Director Economic Research Cameron Kusher said rates would be their highest since September 2012 if the RBA announces another hike.

“With borrowing costs continuing to rise and the subsequent reduction in borrowing capacities, property price falls are likely to continue and accelerate in 2023,” said Mr Kusher, who anticipates another rise of 25 basis points at March’s Reserve Bank board meeting.

“Thereafter, we expect rates to remain on hold, with the potential for them to be reduced in late 2023 or early 2024,” said Mr Kusher.

Camera IconThe PropTrack data is based on the cash rate going up 25 basis points on Tuesday, and a further 25 at March’s RBA meeting. Picture NCA NewsWire / Seb Haggett Credit: Supplied

“We anticipate these further interest rates rises will push prices lower.

“However, a lower interest rate peak and earlier than expected interest rate cuts could ease price falls.”

The same report found the number of inquiries per listing on was down 34.6 per cent year-on-year in December 2022, attributed to less urgency to purchase.

But that also means the median number of days a property was listed on before selling in December was 42, up 10 days from the record low in December 2021.

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