NAB Forecasts 5 Percent Drop in Australian Capital City Home Prices

Economists at National Australia Bank have revised their forecast for dwelling prices across Australian capital cities, increasing the projected decline for the current year to 5 percent from a previous estimate of 2 percent. The bank attributes the downward trend to higher interest rates and changes in taxes applied to property investments.

Specific regional projections indicate that Sydney and Melbourne will experience the most significant impact, with peak-to-trough declines of approximately 10 percent. In contrast, mid-sized capital cities are expected to see more modest decreases ranging between 2 and 4 percent.

National Australia Bank predicts that property prices will stabilize in early 2027. A modest recovery is expected to begin in the second half of 2027 as interest rates decrease.