That is what leading indicators are saying. CoreLogic’s leading mortgage index is suggesting at best a rerun of the pre-rate cut 2015 stall of prices to zero growth (I’ve annotated chart):
Westpac’s “time to buy a dwelling” index is also an excellent leading indicator (I’ve annotated chart) with big dips correlating nicely with price peaks:
Confidence in housing was jolted in May. The Westpac Melbourne Institute ‘Time to buy a dwelling” index fell by 6.5% in May from 96.3 in April to 90.0 in May. Apart from one reading in 2010 this is the lowest print for this Index since 2008 when house prices were falling and the Reserve Bank was raising the cash rate. It is reasonable to explain this move around tighter conditions for bank lending; rate increases for investors supplemented by the spectrum of initiatives in the Budget to discourage housing investors.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
