Property prices in Brisbane is anticipated to reach Melbourne and Sydney’s regardless of what happens with inflation and interest rates. SQM Research in Christopher’s Housing Boom and Bust Report released four 2022 scenarios resulting in Queensland capital’s skyrocketing prices. Base on the report, Brisbane would record the largest dwelling price rises during 2022, along with record number of interstate migration and relatively good housing affordability. The price falls would be led by “overvalued” houses in Sydney and Melbourne, as they were sensitive to even minor intervention by the banking regulator, the Australian Prudential Regulatory Authority.
SQM’s Housing Boom and Bust Report 2022 analysed four scenarios that could impact house prices next year.
Scenario 1: the cash rate would remain unchanged, quantitative easing would scale back, headline inflation at 3 to 5%and further APRA action would happen by June 2022.
Scenario 2: second half year cash rate rises 0.25 to 0.50%, quantitative easing would scale back, headline inflation at 4 to 6% and further APRA action would happen by June 2022.
Scenario 3: the cash rate would remain unchanged, quantitative easing would scale back, headline inflation at 3 to 5% and there would be no APRA action.
Scenario 4: cash rate rises 0.25 to 0.50% in the first half of the year, quantitative easing would scale back, headline inflation at 4 to 6% and further APRA action would happen by March 2022.
Capital city dwelling price change forecasts
Under all scenarios, Sydney and Melbourne are likely to record price declines while Brisbane is set to defy the overall downtrend and is projected to realise gains of 3% to 6% in this scenario. The additional restrictions that could be imposed by APRA will hit the two cities the most. Melbourne is set for the most modest rises, up anywhere between two per cent and six per cent, due in part to the extended lockdowns in 2020. The ongoing international border closures combined now with evidence of current interstate migration outflows will also put Melbourne at a disadvantage.
SQM Research managing director Louis Christopher said the housing market was already showing signs of passing its peak. The Reserve Bank of Australia has said interest rates were likely to hold in 2022 but APRA intervention could occur as early as next month.
