Westpac predicting 15% fall in house prices

However, this will only bring average house prices back to where they were at the start of 2021.

The bank’s economics team previously expected a 10% peak-to-trough fall in prices over this year and the next.  It has now front-loaded the fall, with a 10% drop in 2022 and a further 5% in 2023.

Acting chief economist Michael Gordon says the forecast is of the national average; the economics team doesn’t forecast house prices by region, but obviously there are some regions that will see a bigger than average decline, and are already on track to do so.

“Our modelling suggests a true ‘market clearing’ price right now would be more than 15% below current levels.