BREAKING: The Australian economy grows 0.8 per cent in the March quarter and 3.3 per cent over the year. ASX opens higher. Origin withdraws guidance. Follow updates here.
AMP head of investment strategy and chief economist says Australians should expect further declines in national average property prices, forecasting falls between 10 per cent and 15 per cent.Penny Stephens
His long list of reasons includes: “poor affordability; rising fixed mortgage rates; monetary tightening from the RBA pushing up variable rates by around 2 per cent out to mid next year; higher listings in Sydney and Melbourne; a rotation in consumer spending back towards services; high inflation which is making it harder to save for a deposit; and a collapse in home buyer confidence.”
In the context of huge price surges since 2020 lows, Oliver says a big rise in negative equity is “unlikely”. However, he says those who have purchased in the last 18-month on low deposits “are at risk of negative equity”. After a massive 28 per cent gain from their pandemic lows, Australian home prices booked declines of 0.1 per cent in May, CoreLogic data shows - the first declines since September 2020. This was led by falls of 1 per cent in Sydney and 0.7 per cent in Melbourne.
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