ASB expects an inflation adjusted 20% drop in house prices

The median house price of $875,000 is down $50,000 from its peak in November.

ASB is expecting a 9% decline in national house prices over 2022 with falls continuing into the early part of 2023.

All told it’s about a 12% peak-to-trough decline, says Mike Jones, ASB’s senior economist. “For context, that would only take house prices back to where they were in early 2021, with prices still some 27% higher than the start of the pandemic.

In real (inflation-adjusted) terms – an increasingly relevant metric in the existing environment – Jones expect about a 20% correction, which will be the largest decline since the 1970s.