01 Sep Home price falls accelerated in August
Key Points:
- Australian home prices fell another 1.6% in August and are now down by 3.5% from their high.
- Rising mortgage rates are the main driver and there is likely more to go. We continue to expect a 15-20% top to bottom fall in home prices out to the second half of next year, followed by a gradual recovery.
- There are three reasons why this downturn will likely be deeper and the recovery slower than in past cycles: higher home price to income levels; higher debt levels; and an end to the long-term decline in interest rates.
