ANZ: Housing: Rolling Over

ANZ suggest that "the 20%-plus gains in house prices over the past year won't be repeated in 2022. Affordability constraints are biting, new listings have lifted strongly, and macroprudential tightening and higher mortgage rates are set to constrain lending over the coming year. We expect average capital city housing prices to rise just over 6% in 2022, and to decline around 4% in 2023. We expect housing construction to grow another 15% by mid-2022, before activity brought forward by government incentives starts to dry up. A lift in apartment construction will cushion the fall. Further macroprudential tightening measures are possible. Another lift in the buffer or a measure which targets a combination of high debt-to-income and high-LVR loans is the most likely in our view. But financial conditions are already tightening and the market may do some of APRA's work for it. Indeed, the rise in fixed mortgage rates over the past few weeks may see lending slow enough to obviate the need for further macroprudential measures."