Australian property prices are tipped to peak by late next year, according to a new Goldman Sachs analysis.

It predicts prices will increase by 22% this year and continue rising, though at a lower rate, in 2022 before plateau-ing in 2023.

It expects that APRA will introduce further lending restrictions next year based on loan-to-valuation ratios and debt-to- income, as the Reserve Bank does not intend to move on interest rates until 2024. It has held its key interest rate at a record low 0.1% since November 2020.

RBA governor Philip Lowe has said they will not raise rates to curb mortgage lending but may introduce portfolio restrictions on individual lenders’ shares of lending at high debt-to-income ratios or limit lending at high loan-to-valuation ratios.

“From a policy perspective, we think the softening in price growth over the next few years supports our relatively dovish RBA rates view, given a near-term hiking cycle would weigh on prices and housing-related GDP growth,” Andrew Boak of Goldman Sachs says.