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.”
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