Westpac has upgraded its house price forecasts for both this year and next, despite warnings of more rate hikes and weakening economic conditions.

Nationally, dwelling values are expected to hold flat in 2023, revised from a 7% decline.

Westpac predicts Sydney’s house prices will rise 1% overall this year, a sharp u-turn from its earlier prediction of an 8% decline.

House prices in Brisbane and Melbourne are expected to fall 1% in 2023, while prices in Perth and nationwide are set to hold steady.

The major bank had previously forecast Melbourne house values to decline 10% this year, while Brisbane and Perth would suffer a 6% and 4% drop respectively. 

As a result, Westpac has reversed its nationwide peak-to-trough decline to 10% - a stark difference from its previous forecast of 16%. 

2022 2023f 2024f
Sydney -12% 1% 5%
Melbourne -8% -1% 5%
Brisbane -1% -1% 6%
Perth 4% 0% 8%
Australia -7% 0% 5%

Source: Westpac Dwelling Price Forecasts

Westpac Chief Economist Bill Evans and Senior Economist Matthew Hassan said there are several convincing factors combining to produce a stabilisation. 

“This shift has come despite further official rate rises in February and March,” Mr Evans and Mr Hassan said.

“Housing recoveries in the past have only tended to flow through to prices once the RBA is actively cutting rates or is very clearly poised to do so.

“Prices are now expected to lift 5% in 2024, up from our previous forecast of 2%.

“Further rate cuts and an improving economic backdrop will see momentum carry into 2025 although affordability is likely to constrain upside prospects.”

They noted increased migration, surging construction costs, and low-levels of on-market supply are driving the stabilisation. 

Mr Evans and Mr Hassan said inflation and possible rate hikes later in the year could hamper  the house price stabilisation.

“Another major slide seems unlikely, although gains will be hard to sustain given interest rates and wider economic headwinds,” they said.

“The main risks continue to centre around inflation, particularly if disappointing progress on bringing inflation under control leads the RBA to resume hiking rates, but also if ongoing high inflation constrains the Bank from easing policy in 2024.

“Both developments would clearly undermine housing market improvements and could potentially lead to a reversal.”

With quarterly inflation data set to be released today, most major bank economists are expecting the annual print to fall to 7% (down from 7.8% in December 2022).

House prices rise in March 2023

After remaining relatively flat in February (-0.1%), CoreLogic’s national Home Value Index posted a 0.6% rise in March. 

CoreLogic’s Research Director Tim Lawless said low advertised stock levels, tight rental conditions, and overseas migration contributed to the uplift.

“Advertised supply has been below average since September last year, with capital city listing numbers ending March almost -20% below the previous five year average,” Mr Lawless said.

“With rental markets this tight, it’s likely we are seeing some spillover from renting into purchasing.

“Similarly, with overseas net migration at record levels, there is a chance more permanent or long-term migrants who can afford to, will skip the rental phase and fast track a home purchase simply because they can’t find rental accommodation.”

The national median house value currently sits at $704,723 as of March 2023.


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

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