23 May Australian house prices getting closer to the bottom
Key Points:
- The combination of the removal of the threat to property tax concessions, earlier interest rate cuts, financial help for first home buyers and APRA relaxing its 7% interest rate test points to house prices bottoming earlier and higher than we have been expecting.
- As a result, we now expect capital city average house prices to have a top to bottom fall of 12% (of which they
have already done 10%) rather than 15% and to bottom later this year. - However, given still high house prices and poor affordability, still very high debt levels, tighter lending standards and rising unemployment a quick return to boom time conditions is most unlikely.
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