Aussie housing facing strong headwinds

Aussie housing facing strong headwinds The Australian housing market is in a more precarious position than the United States was before the global financial crisis (GFC), according to a new analysis from AMP Capital which shows households have frittered away record income rises by taking on debt to buy housing. Our mortgage-related debt is higher, property gross rental yields lower (suggesting over-valuation) and our prevailing interest rates are much lower leaving less buffer for interest …

The Australian economy 2019 – house prices, growth and interest rates

The Australian economy 2019 – house prices, growth and interest rates   Key points Australian growth has slowed again. The housing cycle downturn and its impact on the economy will likely see growth constrained to around 2.5-3%.   LAs a result, spare capacity is likely to remain significant, keeping wages growth and inflation low.   The RBA is likely to cut rates in 2019 and the housing downturn will likely see Australian shares continue to …

Proposed changes to negative gearing and capital gains tax hit house prices

Proposed changes to negative gearing and capital gains tax hit house prices Australia’s house prices have fallen for 13 consecutive months, with average Australian capital city prices now down 4% from their peak. The once booming cities of Sydney and Melbourne have led the falls over the last year; while falls in Perth and Darwin, which started several years ago as the mining investment boom ended, have continued. Bucking the national trend, prices in Brisbane …

Boom turns to bust – falling Australian home prices.

Boom turns to bust – falling Australian home prices. How far and for how long and what’s the impact on the economy? Key points Property prices in Sydney and Melbourne are likely to see top to bottom falls of around 20% as credit conditions tighten, supply rises and a negative feedback loop from falling prices risks developing.   Other cities will perform better having not seen the boom of the last few years.   Property …

Outlook for the Australian economy

Outlook for the Australian economy   Investors might have noted some recent positives in the Australian economy. June quarter GDP growth of 3.4% was above potential and its fastest rate since 2012. We have also seen pretty good jobs numbers, with the unemployment rate trending down and sitting at a six-year low of 5.3%. And job ads, job vacancies and employment surveys have also been solid. (While job vacancies growth slowed to 0.6% in the …

Are young families the most vulnerable as house prices head lower?

Are young families the most vulnerable as house prices head lower? The long-term rise in Australian home prices has led to a huge inter-generational transfer of wealth from the young to the old. A material reversal in property values will go some way to unwinding this, creating winners and losers amongst the generations. Australia has long had a love affair with home ownership, which is illustrated by the strong growth in residential prices over the …

What’s next for house prices?

What’s next for house prices? The bottom line is we see more downside in Australian house prices. That is, of course, a broad generalisation and it depends on where you live. Australian house prices have fallen for ten consecutive months driven mainly by declines in Sydney and Melbourne, which are coming off the back of a huge boom. Nationwide, there is likely more downside to go with expectations of another 5% decline. We’ve seen a …

What’s happening to oil prices?

What’s happening to oil prices?   Australians can expect to pay more for petrol at the bowser as oil prices move higher in the short-term. Yet the price rises won’t force the Reserve Bank to hike rates as a significant acceleration in inflation is unlikely. Do I see the oil price continuing to surge higher? Short term, yes it could go a bit higher as global demand remains strong. The cost of oil has risen …

A slip in house prices is no reason to panic

A slip in house prices is no reason to panic The current slide in Sydney and Melbourne residential property prices will fall far short of a housing bust, according to AMP Capital Head of Investment Strategy and Chief Economist, Shane Oliver. House prices in Sydney have fallen about 5 per cent this year from last year’s peak, and eased slightly in Melbourne according to Oliver, who adds that both markets may have further softness ahead. “I …

If you’ve always thought property prices only go up…

If you’ve always thought property prices only go up… It may be time to reconsider some myths about property investment. With so much emphasis on property in the media, it can be difficult to sort fact from fiction. But before investing in any type of asset—including property—it pays to consider the pros and cons, and any commonly held misconceptions. Here we bust 3 property myths. Myth 1: Prices always go up Believing that property always …