RENEE MCKEOWN THU 25 NOV 21
Brisbane property prices will start to catch up to Melbourne and Sydney’s regardless of what happens with inflation and interest rates rises.
An upsurge for prices in the Queensland capital is tipped as an outcome of four 2022 scenarios released by SQM Research in Christopher’s Housing Boom and Bust Report.
The forecasting showed property prices would slow next year, agreeing with the big four banks’ predictions, however, some cities would fare better than others.Brisbane would record the largest dwelling price rises during 2022, supported by expected strong interstate migration flows 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.
The scenarios
Scenario 1: the cash rate would remain unchanged, quantitative easing would scale back, headline inflation at 3 to 5 per cent and further APRA action would happen by June 2022.
Scenario 2: second half year cash rate rises 0.25 to 0.50 per cent, quantitative easing would scale back, headline inflation at 4 to 6 per cent 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 per cent and there would be no APRA action.
Scenario 4: cash rate rises 0.25 to 0.50 per cent in the first half of the year, quantitative easing would scale back, headline inflation at 4 to 6 per cent and further APRA action would happen by March 2022.
Capital city dwelling price change forecasts
^Source: SQM Research
Meanwhile, rent would rise in all capital cities over and above the consumer price index.
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.
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