Morgan Stanley: Aussie house prices to keep crashing

Friday, 12 April 2019

Via Morgan Stanley:

With a lead of three quarters, this suggests that housing weakness is likely to persist through to the end of the year at least, with further downside to both approvals and prices.

Credit supply is holding at very tight levels, with little relief expected post the completion of the Royal Commission.

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With the pipeline of housing construction still elevated, the supply-demand surplus drove weakness in the quarter and we expect this won’t close until the end of 2020, even with sharp declines in approvals.

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About the author

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.