Housing prices will rise 21% in 2021: ANZ

2 min read | November 18, 2021 08:19 PM AEDT | By Sukriti Nair

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Housing prices will rise 21% in 2021: ANZ — Image source: © Andreyyalansky19 | Megapixl.com

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Highlights

Australia and New Zealand Banking Group ANZ sees housing price growth by 21% in 2021.

However, the bank says supply, reduced affordability, and rising interest rates will end the property boom.

ANZ predicts constant official interest rates until 2023 as of now.

Australian Big Bank, Australia and New Zealand Banking Group Limited (ASX:ANZ) has released its housing price growth forecast for 2023. It expects the housing price boom to end after a slowdown next year. Economists from the ANZ’s research team have predicted that affordability constraints and prudential tightening will lead to the downfall over the coming years.

The latest housing price forecast released by ANZ predicts-

Housing prices will rise 21% in 2021.
The growth will slow its pace and is being forecasted at 6% in 2022.
ANZ even expects a 4% fall in 2023, ending the housing boom.

At present Sydney is experiencing a boom in house prices. The state has seen a record-breaking 30.4% surge. ANZ expects this rate to moderate to 6% next year. New listings of houses on sale since October are at their highest in the past four years. The availability is offering more choices for buyers.

However, buyers are pulling out of home buying or property investment due to affordability constraints. In addition, higher mortgage rates mean that previous gains in house prices would not repeat in 2022. Hence ANZ has predicted a negative 4 per cent growth in 2023.

Bottom line

Low-interest rates are one of the critical reasons for property market growth. However, with financial conditions tightening, a pandemic like a boom in property prices might not occur again.

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