July Market Insights

July Market Insights

Australian dwelling values fell by -1.3% in July, marking the third consecutive month Core Logics national home value index has fallen

As discussed with Tim, although the housing market is only three months into a decline, the national Home Value Index shows that the rate of decline is comparable with the onset of the global financial crisis (GFC) in 2008, and the sharp downswing of the early 1980s. In Sydney, where the downturn has been particularly accelerated, we see the sharpest value falls in almost 40 years.

Regional markets have weakened, however, rental market is strong, there continues to be diversity across the states and there is hope that Spring will bring more stock onto the market, however, it will remain a buyers market.

On a more positive note, this interest rate hiking cycle may be short and sharp, with financial markets and some economic forecasters now factoring in interest rate cuts through the second half of next year.

“When interest rates start to stabilize, or potentially reduce next year, this could be the cue for housing values to find a floor,” Mr. Lawless said.  “Similar to the trajectory of the upswing, this downswing phase could be a short but sharp one, depending on how high and fast interest rate settings go.”

In the meantime, the housing market is set to face some near-term challenges.