– with record auction volumes and a significant lift in property listings in late 2021 – were the main factors currently driving the moderation in price growth. However, the impact of rising fixed mortgage rates and tighter lending standards would be seen throughout the year, as house hunters faced reduced borrowing power.
Though the reopening of borders, and return of expats and new arrivals, would add to housing demand, it would not be enough to change the slowing housing picture, she said, noting interest rates would again be a larger driving force for prices. “[Lending limits] in combination with this growing expectation of a rate hike – and not just one but a cycle of rate hikes in coming years – will flatten the market out in the second half of [this] year,” he said.Westpac has forecast capital city prices to rise another 8 per cent this year, with a correction of 5 per cent expected in 2023.
“[It] comes back to a difference in supply dynamics, and it comes back to the affordability story,” she said.
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