01 Sep The Australian home price downturn deepened in August, with more to go
Key Points:
- The slump in national average home prices continued in August with prices down 0.9% according to Cotality, their fifth monthly fall. The fall in July was revised down to -1.2%.
- Further falls are likely as we continue to expect another RBA rate hike by November, possibly in September, the negative impact on investor demand from the tax changes will impact for a while and confidence is likely to remain weak.
- We now expect national average property prices to have a top to bottom fall in prices of around 10%, of which they have done 3.6% so far. Capital city prices are likely to see a top to bottom fall of 11%, with Sydney around 13% of which its already done 7.1%.
- The home price slump will weigh on economic growth, but is not significant enough yet to change the direction of the RBA rate moves from up to down given high inflation.
