Economists say migration and a halt in the RBA’s rate increases underwrite hopes for a soft landing.
RBC Capital Markets revised its peak-to-trough house price fall to 9 per cent, from 16 per cent previously, on Tuesday. “Nationwide house prices in Australia appear likely to trough in the second quarter of the year, around one quarter earlier than we had expected,” said RBC Capital Markets chief economist for Australia Su-Lin Ong.
The looming shift of $400 billion of fixed-rate mortgages to variable rates is a key reason UBS predicts home prices will fall further. AMP predicts the current bounce in home prices will be shortlived. Demand from bargain hunters will run its course and distressed selling will happen as economic conditions deteriorate. “We continue to see average home prices resuming their falls later this year,” said Shane Oliver, chief economist at AMP.
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