It is not easy to keep up with the madness, via HSBC’s Bloxo:
“We expect the housing market to stabilise by the second half of 2019.
Our forecasts are that national housing prices will have a peak to trough decline of around 10 to 15%, so our central case is that the correction is nearing its end.
Evidence of some stabilisation in the housing market is starting to accumulate.
Auction clearance rates in Sydney and Melbourne are picking up, albeit from low levels, as are loan approvals, particularly for first home buyers.
Given that prices have fallen quite a lot, and are still falling at this point despite tentative evidence of a modest improvement in market conditions, it’s little wonder why some are concerned this will drag on the Australian economy, especially given the slowdown in the economy last year coincided when home price declines were speeding up.
…The fall in housing prices has had some effect on the economy.
As housing prices have fallen, turnover of dwellings has slowed and this has weighed on sales of motor vehicles and furniture, which are goods which often get sold when houses are exchanged. However, much of the rest of the consumer spend has been fairly well supported. Consumer sentiment is above average and has been so through most of the housing market correction.
There have been few signs of distressed sales. Housing turnover has slowed, not risen. Mortgage loan arrears and defaults are low..
Mortgage serviceability remains strong because interest rates are low and the jobs market has been improving. Employment growth is currently above average, the unemployment rate is at an eight-year low of 5% and job vacancies are at a record high as a proportion of the workforce.”
And there you have the exact reason why the RBA is in such a mess:
Our forecasts are that national housing prices will have a peak to trough decline of around 10 to 15%, so our central case is that the correction is nearing its end.
Bend reality to your model and not the other way around.
Don’t get me wrong, I agree that house price falls will stabilise over the next year (but keep falling ocer the longer run) but only if the RBA cuts four times. Bloxo sees no cuts.
In that event prices will crash on.
