Canberra housing prices to decline 11 per cent in 2023, according to ANZ housing forecast

In February, the bank was forecasting Canberra prices would rise by 9 per cent this year but has revised its prediction to suggest housing prices will end the year unchanged.

According to ANZ's latest housing report, a "steep increase in mortgage rates over the coming year will weigh heavily on house prices".

The bank is expecting the cash rate to reach 2.35 per cent by mid-2023, resulting in reduced borrowing capacity and lower property prices.

ANZ senior economist Felicity Emmett said the impact of the recent cash rate rise will begin flowing through to housing prices this year.

"The year started off really solidly. We saw at the end of last year housing finance picking up again, the [national] January results were very strong and so we went into the year with quite a lot of momentum," she said.

"Prices are still growing in Canberra, they were up 3 per cent in the first quarter ... they're up in April as well quite solidly and so it looks like we'll get another quarter of growth. But then we think those higher rates will start to flow through in the second half of the year.

"Next year, we're looking at an 11 per cent decline. Now that is a little bit larger than what we're expecting for the country as a whole and that probably just reflects a slightly larger correction after significantly larger gains over the last couple of years."

Nationally, the bank has predicted housing prices across the combined capitals to fall 3 per cent this year and a further 8 per cent by the end of 2023.

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Property prices in Sydney and Melbourne have already begun to fall and ANZ predicts further declines of 8 per cent and 6 per cent in 2023.

The bank expects Brisbane, Adelaide and Perth to make further gains this year, before price drops of 9 per cent, 13 per cent and 7 per cent respectively next year.

Where 2021 was undoubtedly a seller's market in Canberra, forecast price falls next year could give buyers the upper hand.

"We're already seeing the number of days to sell has been increasing and I think what you'll see is those vendor discounts start to widen as vendors adjust and realise that perhaps they're not going to get as high a price as they anticipated and it will give buyers more negotiating power," Ms Emmett said.

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