The hangover homeowner had to have?

Regardless, there is a good chance that the record decline in house prices will be broken again in the coming months. CoreLogic, which measures and analyzes real estate prices, predicts that the market will continue to fall before finally stabilizing.

The major economists almost agree that real estate values ​​will fall by about 15 percent in this cycle. Some expect a more extreme 20 percent collapse.

It is almost certain that property values ​​will continue to fall as the RBA continues to hike rates.

And the brunt of the price declines so far has been felt in Australia’s three largest cities, Sydney, Melbourne and Brisbane, which registered declines of 13 percent, 8.6 percent and 10 percent, respectively.

The RBA has found solace in the fact that the mortgage delinquency rate has remained fairly benign to date. It’s only the crop of home loans made at or near the peak of the housing market earlier in the last year that gets into trouble.

And with unemployment rates at historic lows, most homeowners who bought at the peak are generally able to service their higher-priced loans.

The central bank will also look at recent house price movements from a historical perspective. Even a 20 percent drop won’t offset the 28 percent surge the market has seen over the previous 18 months.

Reserve Bank Governor Philip Lowe will be under pressure at the February central bank meeting to avoid excessive rate hikes.

Reserve Bank Governor Philip Lowe will be under pressure at the February central bank meeting to avoid excessive rate hikes.Credit:AAP

There could be deflation in home prices, as hungover homeowners must have.

With each rise in interest rates, the ability of market participants to borrow is further eroded, which in turn reduces demand for housing.

And the big banks have been open about their expectation that 2023 will be a weaker year for the growth of their home loan mortgage books.

CoreLogic notes that Australians are also more indebted today than in historical periods of rate hikes, with the Reserve Bank of Australia’s latest estimate putting the debt-to-income ratio in housing at 188.5 percent.

And the ability to collect bail has been eroded by the current higher cost of living.

With more falls on the horizon, there is still little incentive for bargain hunters to enter the market.

The Business Briefing newsletter delivers important stories, exclusive coverage and expert opinions. Sign up to receive it every weekday morning. The hangover homeowner had to have?

Brian Lowry

InternetCloning is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – The content will be deleted within 24 hours.

Related Articles

Back to top button