Housing prices tipped to crash

HOUSE prices across the country are set to plummet by at least 10 per cent in the next year, two of the nation’s top bank bosses have warned.

Commonwealth Bank chief Matt Comyn and ANZ boss Shayne Elliott warned on Friday homeowners should brace themselves for a significant fall to their home values.

The pair were quizzed before a parliamentary committee to discuss their response to the COVID-19 pandemic, and revealed a grim outlook for homeowners.

“Our base case scenario would see house prices falling in somewhere in the order of 10 to 12 per cent,” Mr Comyn said.

“Clearly acknowledging there’s a lot of different parts of the market, broadly regional areas are performing better than metropolitan areas.”

Mr Comyn expected a harder hit to apartments, particularly those in inner-city areas, versus houses.

Despite this, latest CoreLogic figures show house prices nationally delivered positive growth in the past 12 months.

In Sydney they climbed by 11 per cent, Melbourne 6 per cent, Brisbane 4.3 per cent, Adelaide 6.7 per cent, Perth 2.1 per cent, Hobart 11.4 per cent, Darwin 8.4 per cent and Canberra 7.9 per cent.

Mr Comyn said despite the predicted falls the housing market had been “particularly more robust” than predicted back in May. Back then CBA forecasted that house prices could fall by up to 32 per cent by the end of 2022.

During the pandemic CBA customers have deferred more than 250,000 loans totalling $60bn.

ANZ’s Mr Elliott said they too expected a fall in house prices of around 10 to 15 per cent this financial year.

“What we expect is there will be a reduction in house prices … but Australia’s not one market,” he said. “There’s a danger at looking at averages, our number is about 10 per cent from peak to trough.”