Property prices set to fall even further
The housing market is still facing ‘considerable’ downside risk.
Property prices around the country have been falling, but those falls have been easing slightly since September 2022.
However, despite the momentum easing, Aussies have been told home prices have yet to reach their bottom, according to CoreLogic.
CoreLogic said the housing market was still facing considerable risks, and the property market could still have some way to fall.
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“Interest rates may rise further from here, as well as the fact that we are yet to see the full impact on households from the aggressive rate-hiking cycle to date,” CoreLogic said.
“Additionally, economic conditions are set to weaken through the middle of the year, as household savings buffers are being depleted and labour markets are likely to loosen further.
The report said one of the key metrics to watch would be the flow of new listings coming onto the market.
“Any sign of a larger-than-normal level of freshly advertised stock could signal that prospective vendors aren’t willing or able to wait out the downturn any longer,” CoreLogic said.
“A rise in advertised supply to above-average levels could be a signal this recent trend of growth has run out of steam.
“Given the uncertainty ahead of us, the next few months will be critical to understand whether the housing market is indeed moving through an inflection point or if it is simply the eye of the storm.”
But if a further drop in home prices is expected, what’s currently keeping prices higher?
CoreLogic reported capital city listings over the past four weeks were 19.9 per cent below the previous five-year average for this time of the year.
“Such low advertised supply is likely to be a central factor keeping a floor under housing prices, despite a clear drop in demand,” the report said.
“At the same time, we have also seen a rise in auction clearance rates back to around the decade average.”
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