Is this the end of the property boom?

As new APRA rules start, pundits predict 'peak property'

Is this the end of the property boom?

APRA’s new rules come into effect today, requiring lenders to make sure that new borrowers have a sufficient affordability cushion to weather an interest rate increase.

Hot on the heels of that potential curb on borrowing, property commentators have started to predict when the giddy real estate price race might slow.

According to CoreLogic figures, the cost of housing rose 1.5% last month, following similar gains in the preceding two months. Despite that growth, CoreLogic researcher Tim Lawless thinks that this month could be critical.

“The market is becoming much more diverse and much more fragmented, depending on things like affordability, migration, and sentiment,” Lawless told The Australian.

“We’ve got the tighter credit restrictions started to go live this month and more recently, we’ve started to see a lot more speculation about high inflation.”

Shane Oliver, the chief economist at AMP Capital is also predicting pressure on the market – and he is also saying when and how much property prices will be hit.

Oliver was the first at a big lender to start predicting a rate hike last week – on Wednesday he predicted a rise of between 0.1% and 0.25% in November next year (with CBA following up with its forecast of 0.15% in the same month of 2022 and NAB predicting a 2023 hike of 0.4%).

Interest rate rise predictions



Nov 2022




Nov 2022

Dec 2022



Mid-2023 (cash rate 1.75%+ by end of 2024)



Second half 2023



Q2 2023

So, when is the property market going to peak? According to Oliver it will be from September next year; and momentum could see markets down by as much as 10% by 2023. if the fall picks up steam, he sees a potential 20% drop through 2023 and 2024.

“By the end of next year, I think the upswing will come to an end, and we’ll start to see price falls as higher interest rates feed through,” Lawless told the Australian Financial Review.

“I think later next year, we’ll start to see higher variable rates, and the combination of higher interest rates, poor affordability and increased listings, I think will start to weigh on the property market.”

For now, home loans are still outperforming expectations - September figures released by the ABS show a home loan fall of 1.4% which is substantially better than Bloomberg’s economist survey predicting 2%.

Home loans in September

Owner-Occupier               -2.7%

Investor Loans                   +1.4%