Australian property prices are falling across more than 90% of suburbs, and economists expect the Reserve Bank to press ahead with a fourth interest rate hike despite the prospect of the steepest housing downturn on record.
Key facts
- Cotality data shows house prices are falling in more than 90% of Australian suburbs.
- Analysts predict house prices could fall by 10%.
- Economists expect the Reserve Bank to deliver a fourth interest rate hike.
- The downturn is being driven by higher borrowing costs, a weak economy and changes to the tax treatment of property investors.
- Analysts describe the potential decline as the steepest property market downturn in history.
Australian house prices are heading for what could be the steepest downturn in the country’s history, with new data showing declines are now widespread across the market, according to the Guardian.
Figures from property analytics firm Cotality reveal that prices are now falling in more than 90% of Australian suburbs. Analysts cited by the Guardian predict that house prices could fall by as much as 10%.
Despite the prospect of a historic downturn, economists say the Reserve Bank is expected to press ahead with a fourth interest rate hike as it works to bring inflation back under control.
The Guardian reports that the market weakness is the result of what it describes as a perfect storm of factors: higher borrowing costs, a weak economy, and a once-in-a-generation change in the tax treatment of property investors.
The combination of these pressures has left the vast majority of suburbs recording falling values, with economists expecting the downturn to continue in the period ahead.
The affected markets referenced in the reporting span major Australian cities, including Sydney, Melbourne, Brisbane, Perth and Adelaide.
Why it matters
Housing is a central part of household wealth and financial security for millions of Australians, so a downturn of this scale would affect homeowners, buyers and investors alike. A fourth interest rate hike arriving as prices fall highlights the difficult balance the Reserve Bank faces between controlling inflation and managing the broader economy.
Frequently asked questions
How much could Australian house prices fall?
According to the Guardian, analysts predict house prices could fall by as much as 10%, in what would be the steepest property market downturn in history.
How widespread is the price decline?
Cotality data shows property prices are now falling in more than 90% of Australian suburbs.
Why are house prices falling?
The Guardian reports the decline is being driven by higher borrowing costs, a weak economy, and a once-in-a-generation change in the tax treatment of property investors.