On Monday, Macquarie released forecasts for a 7.5 per cent drop in property prices nationwide from next March.
Yet in the past decade, there have not been any national annual drops of more than 5 per cent, Domain Group senior economist Andrew Wilson said.
“Even in periods where we had prices falling, such as during 2008 when it was the global financial crisis, the national house price fell by just under 4 per cent after a significant period of higher interest rates,” he said.
“It would be an historical first and is unbelievably unlikely.”
…HSBC chief economist Paul Bloxham was also clear that Sydney and Melbourne would not drop in value, and in fact forecast prices to continue to rise in 2016.
I probably agree with Bloxo here but for all the wrong reasons. He expects house prices to keep rising with flat interest rates (despite his own bank going over his head on cuts). I expect price growth to fall far enough to force the RBA to cut again. That will assuredly support the market for a few more months though I expect no repeat of this year’s blow off.
In truth, I have no idea when prices will actually begin to fall – before or after the next global shock – but I’m confident that the peak is effectively near and that prices are going to fall in the foreseeable future.
As for Dr Andrew, he will tell you to buy even as cement is poured over his and the market’s dead head.
