No turning the corner on house prices

In its latest Property Focus, the ANZ says the housing market is about two thirds the way through a 15% peak-to-trough decline.

Mortgage rates are still lifting, housing scarcity has been eroded, and affordability remains dire - albeit a little better.

Importantly, says ANZ’s chief economist Sharon Zollner, if the market does put out any green shoots while the labour market remains tight and Consumer Price Index (CPI) inflation is too high, the Official Cash Rate (OCR), and consequently mortgage rates, will likely need to go higher than otherwise.

Prices have been slipping a little more than 1% per month on average since late last year. The bank’s forecast is for monthly declines to continue at roughly this pace for the remainder of the year, before gradually finding a floor over the first half of 2023.