Australian house prices are either stalled or falling.
The primary reason for this is the worsening job market and the rise in interest rates.:
If you want to buy a home, now is the time to do it, while sentiment is weak.
In the Australian real estate market, you will never find a deal. However, there are times when prices are falling, and lowballing is a smart move for purchasers.
That is where we are now.
But, by the time we reach the second half, the property market will begin to rise on interest rate reductions.
Prices move swiftly to add a premium when mortgages become cheaper.
More broadly, there is still a strong case for property.
The unchecked immigration policies of the Albanese government are the driving force behind demand.
On the supply side, construction remains very weak owing, again, to excessive immigration and terrible energy policy driving building costs.
Vacancy rates will not return to normal anytime soon and rents will continue to be high enough to attract investors.
The housing shortage in Australia will persist for years until price gains finally trigger a supply response.
Last but not least, interest rate reductions are expected in the second half of 2024.
Markets have only factored in a small number of cuts through 2025. However, the RBA has overcooked its rate hikes and crashed the consumer economy. It will need to pivot sooner and cut.
With China’s economy plodding through an endless structural adjustment, the future is also likely to be more cuts, not less.
The prices of oil, gas, coal, and green metals have already plummeted. Next up will be the bulk commodities.
When that income shock lands on the economy ahead, nominal growth and the budget will buckle.
While this bodes poorly for miners and WA, it bodes well for East Coast homeowners as loan rates drop more than anyone expects.
