Westwood Conveyancing

Australian house prices have fallen 0.5%

Australian house prices starting to fall

   ... collapse likely averted but expect more weakness ahead 

   DR SHANE OLIVER

Key points

• Australia capital city home prices fell -0.5% in May.
• Significant policy support & the earlier reopening of the economy have made our worst-case scenario for a 20% decline in average Australian house prices unlikely.
• However, our base case is for home prices to fall around 5-10%, as “true” unemployment will remain high, government support measures and the bank payment holiday end in September, immigration falls and new supply is likely to be boosted via government measures.

Introduction

Back on 19th March when we first looked at the impact of the intensifying shutdown of the Australian economy on the housing market (see here) we concluded that the impact would depend on how high unemployment rose.

Our base case was a recession that saw unemployment rise to around 7.5% and would push average home prices down around 5%, but the risk was that a deeper downturn with say 10% unemployment could see a 20% fall in prices.

Subsequent government support measures along with an earlier reopening of the economy have reduced the risk of worse case scenarios for home prices.

So far so good

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Source  :  https://www.ampcapital.com/au/en/insights-hub/articles/2020/june/australian-house-prices-starting-to-fall?csid=1135474858

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