House Prices in Sydney Melbourne fall most in 10 years

Did House prices in Sydney and Melbourne fall by the most in 10 years?

Australian house prices have fallen since mid-2017, and by far the biggest drop since the global financial crisis 10 years ago, adding to the pressure on the RBA to cut interest rates as early as next week.
Data released by Corelogic on Wednesday showed that house prices in the eight capital cities fell 0.5% month-on-month in April and 8.4% year-on-year.
Oz House prices in Sydney Melbourne fall most in 10 years

After peaking in September 2017, house prices have now fallen by 9.7%, compared with a 7.6% decline during the global financial crisis. The cause of the global financial crisis was the bankruptcy of Lehman Brothers, the US investment bank, in 2008.

Housing prices in the populous Sydney and Melbourne continued to lead the decline. House prices in the two places were 14.5% and 10.9% below their 2017 highs, respectively.

What is the background of the decline in Australian house prices?

Australia has introduced stricter lending standards in recent years in order to cool the surge in house prices driven by real estate investors; and The misconduct was severely investigated.

The April house price data contained some signs that the decline was beginning to slow, but not enough to prevent the decline from continuing into 2020.

CoreLogic research director Tim Lawless said the slowdown in house price declines can be attributed to the easing of the downturn in the Sydney and Melbourne housing markets; house prices in these two cities have fallen much faster.

However, Shane Oliver, chief economist at AMP Capital, said that his basic scenario is expected to remain unchanged, that is, the decline in house prices in capital cities is expected to decline by 15%, and the decline will continue into 2020.

What are the Expectations on house prices in Sydney and Melbourne?

 Oliver expects house prices in Sydney and Melbourne to fall by about 25% from high to low over the same period.
Australia Scenery

For the RBA, falling house prices is a worrying issue. It is widely expected that the RBA will debate the rate cut at its policy meeting next Tuesday. The decline in house prices has led to a reduction in consumer spending, which has caused Australia's gross domestic product (GDP) growth to have fallen sharply since mid-2018.

If the RBA decides to cut interest rates next week, it will be the bank's first rate cut since August 2016, and it will be Philip. Philip Lowe cut interest rates for the first time since becoming president in September 2016.

Data released a week ago showed that the Australian consumer price index (CPI) was flat in the first quarter, but slowed to 1.3% from the same period last year, lower than the central bank's 2% -3% target Interval.

Although inflation and growth are weakening, full-time employment growth remains strong, which may allow the central bank to stand still.

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