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Greg Gibbs, analyst at Amplifying Global FX Capital, suggests that the Australian housing market appears to be stabilising after falling for around 21 months, reaching a peak rate of decline in the first quarter this year.  

Key Quotes

“The CoreLogic national capital city daily index is down around 10.5% from its peak in October 2017.   It has not clearly bottomed yet.”

“The housing market was under severe downward pressure early in the year partly on fears that the national election held in May would deliver a change of government to the Labor Party that had a policy of removing tax breaks on property investment.”

“This risk did not materialise. Furthermore, the returned LNC government went into the election in May with a policy to provide concessional loans to first home buyers with a government guarantee to allow them to qualify for a bank mortgage and purchase their first home. The scheme is expected to begin next year.”

“A rapid rebound in the property market is unlikely with excess supply still hanging over some parts of the market, slower population growth and less foreign demand than past cycles, and a tightening in credit availability over the last two years that is likely to remain in place, even if it has eased recently.   However, a range of factors have improved, and buyers waiting for evidence that the market is stabilising are likely to return to the market and provide more balance.”