NAB Forecasts Deeper House Price Falls to 2027
NAB Expects House Prices to Keep Falling Into 2027
Australian home values have now dropped for six months in a row. NAB doesn’t think the slide is over yet.
In its latest Housing Monitor, the bank lowered its forecast again. Clarify that 11% is the forecast peak-to-trough decline, not the fall expected in 2026 alone
If you’ve been waiting to buy, that sounds like good news. But the full picture is a bit more mixed.
Not every city will fall the same
Sydney is tipped to fall the most, around 14%, and it’s already 8.6% below its peak. Melbourne, Brisbane and Perth are each forecast to fall about 11%. Adelaide is expected to fall 8.5%. CBA is a little more cautious, expecting a 9% fall that runs well into 2027.
Cheaper homes, but smaller loans
Here’s the catch. There have been four rate rises this year, and Clarify that this is an estimate, and the impact varies by borrower and loan assumptions . So even as prices drop, many buyers can borrow less than before.
Equifax data backs this up. Overall mortgage demand is down 14.1% on last year, and first-home buyer demand is down 20.1%.
What’s happening in lending
New home loan commitments fell 5.2% in the June quarter. Investor loans dropped 10.2%, while owner-occupier loans slipped 1.9%. Homes are also taking longer to sell, with a median of 41 days on the market, the slowest since late 2020.
There is some reassurance. The RBA’s latest Financial Stability Review found most households appear able to handle a period of falling prices. Loan arrears are steady at around 1%, and refinancing activity has jumped.
How to get ready now
Forecasts are useful, but your own numbers matter more. A few things worth doing:
- Check your borrowing capacity first. Our borrowing capacity calculator is a good starting point. Last year’s numbers may no longer apply.
- Refresh your pre-approval. A current home loan pre-approval shows you what a lender will actually approve today.
- Watch your deposit and LVR. Falling values can push your loan-to-value ratio up, which matters if you plan to upgrade or refinance. We covered how rates and prices work together in our post on the HSBC forecast.
- Review your current loan. If your rate hasn’t been looked at lately, refinancing might ease your repayments. Our refinancing blog explains why so many Aussies are doing it.
Prices may keep softening until mid-2027, but a falling market only helps if you’re ready to act. Good preparation puts you in a stronger position, whatever the headlines say.
At OM Financials, we make the loan process simple and guide you every step of the way. Speak with our brokers today to understand your borrowing power in this changing market. Book your free consultation or contact us anytime on 0478 876 967.
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