House prices are tipped to rise by up to 6% by the end of this year according to predictions by ANZ. ANZ Senior economist Adelaide Timbrell says the impact of housing shortages and tight rental vacancies are outweighing any impact of interest rate rises. “Forward indicators including housing finance approvals and auction clearance rates suggest that further housing price increases in the near term,” she says.
Timbrell predicts growth will slow to about 3% in 2024, impacted by rising unemployment and the lagging impact of past rate hikes, as well as slower population growth. “We (then) expect housing prices to reaccelerate to around 4% to 5% in 2025, supported by a modest cut in interest rates,” she says. Australian Bureau of Statistics (ABS) lending indicators data, shows the value of total housing loan refinancing remains high at $20.2 billion in June 2023. ABS head of finance statistics Mish Tan says borrowers are continuing to switch lenders, looking for better deals as interest rates rise.