PHOTO: Tom Panos
- Westpac is warning of interest rate rises and a big drop in property prices
- Sydney property prices to drop by 14 per cent, Melbourne by 15 per cent
- Real estate agents may have to work at KFC if auctioneer Tom Panos is right
The Block auctioneer Tom Panos has warned real estate agents to brace for the looming housing price drop – with one of Australia’s biggest banks forecasting a plunge.
Both Westpac and the Reserve Bank of Australia have forecast double-digit falls in property prices with interest rates expected to rise from next week and keep going up.
Westpac on Friday predicted a 14 per cent fall in property prices in Sydney over the next two years, and a 15 per cent plunge in Melbourne.
The dramatic developments led Mr Panos to warn real estate agents in a social media video that they may find themselves forced out of the profession and back to their old jobs in fast food.
Tough love: Auctioneer Tom Panos calls on real estate agents to brace for housing price falls
‘The KFC managers are going to leave real estate and head back to KFC,’ the real estate guru said.
‘And you know who’s going to stay behind – professionals, people who are going to know how to negotiate, and create urgency, where there is no urgency.’
Real estate agents tend to rely on commissions when a property they are selling is sold.
Therefore, with decreasing dwelling prices, many can expect a hit to their pay packets.
Westpac is predicting that smaller cities will be less affected over the next two years, with small drops followed by a quick recovery.
Perth prices are forecast to fall by five per cent, Brisbane to grow by one percent, and the nation’s prices overall are expected to tumble by 11 per cent.
Property price forecasts: 2022-24
SYDNEY: 2022 (- 3 per cent); 2023 (- 9 per cent); 2024 (- 2 per cent)
MELBOURNE: 2022 (- 3 per cent); 2023 (- 9 per cent); 2024 (- 3 per cent)
ADELAIDE: 2022 ( + 3 per cent); 2023 ( – 4 per cent); 2024 (+ 1 per cent)
BRISBANE: 2022 (+ 4 per cent); 2023 (- 4 per cent); 2024 (+ 1 per cent)
PERTH: 2022 (flat); 2023 (- 6 per cent); 2024 (+ 1 per cent)
HOBART: 2022 (- 2 per cent); 2023 (- 6 per cent); 2024 (- 2 per cent)
AUSTRALIA: 2022 (- 2 per cent); 2023 (- 8 per cent); 2024 (- 1 per cent)
Three of Australia’s big four banks – Westpac, ANZ and NAB – are forecasting the cash rate rising from a record-low of 0.1 per cent now to 2 per cent by 2023.
Just three weeks ago, the Reserve Bank of Australia predicted an increase in the cash rate to two per cent would cause Australian property prices to plunge by 15 per cent.
The RBA is widely expected to raise the cash rate next week – on May 3 – by 0.15 percentage points, following the biggest inflation surge in 21 years of 5.1 per cent.
This would be the first official increase since November 2010.
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