Via The Australian comes KPMG catching the falling knife:
Peak-to-trough adjustments in dwelling prices are expected to be minus 12.9 per cent in Sydney and minus 4.5 per cent in Melbourne.
KPMG chief economist Brendan Rynne said tighter lending standards by APRA and less investor financing had taken its toll.
“There has been a falling away in foreign interest, notably from China, and lending to domestic buyers is stricter, while housing supply has increased. This is why prices have declined — but we believe that process will reach its peak over the next few months and then go into reverse later this year,” he said.
Sydney house prices are predicted to fall 4.3 per cent in FY19, followed by a further decline in FY20 of 1.3 per cent. Growth of 3.5 per cent is expected in FY21.
A dip of 2 per cent is likely in Melbourne in FY19, before growing 2.4 per cent and 4.7 per cent over the following two financial years.
One can never rely on journalists to get the facts right and I’ve not got this report. But given Melbourne is already down nearly 8% and Sydney approaching 12% peak-to-trough somebody has something very wrong.
As for the future of prices, I see no reason to predict a bottom. When the RBA cuts we ought to see some stabilisation but not for very long unless something drastic changes from today’s outlook:
- structural change to tighter lending standards;
- negative gearing reform;
- fleeing Chinese and
- a structurally slowing China and a weakening local economy.