Before today's interest rate decisions, all sides of house prices in Sydney are going for another $ 60,000 slide by 2020, with hot Melbourne on his heels with a $ 50,000 fall.
Those figures are the expected result of a further 8 per cent fall in prices, according to the RBA Finder Silver Rates Survey.
While the median for Sydney's house prices currently stood at $ 930,000, a projected 6.21 percent reduction would mean that the new median was $ 872,242 – a reduction of almost $ 60,000.
Melbourne's property decline is now officially the worst ever
CoreLogic figures, released today, show that house prices in Sydney have already experienced an annual decline of 10.6 percent, and then Melbourne is 9.8 percent.
Prices in Sydney are now back to where they were in 2016. Melbourne is back to August 2017.
Only Hobart, Canberra, and Adelaide have escaped gravity pulling tighter lending standards, and a general sense that the music has stopped, but even these cities have seen prices flat or even start to fall. in the last quarter.
As house prices rise, so does consumer spending in what is called the effect of wealth. But a similar thing is true on the downward slope, with the latest ABS consumer spending figures weak.
This economist Market Market Economist Stephen Koukoulas leads to suggest that the Reserve Bank will drop the official currency rate on Tuesday.
We know that the economy is weakening, we saw only the CoreLogic numbers, ”said Mr Koukoulas.
“Another price fall, we know that that has an impact on consumer spending.” T
He said that even if the RBA had not broken tomorrow's rates, the question was more when it was rather than.
“How weak will the economy have to be before they go?” He said.
“If we look at GDP numbers, the last two quarters were very weak last year.” T
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LOWER RATES WILL NOT RECOVERY THE BOOM
Mr Koukoulas told News.com.au he believed that even if the RBA were cutting rates, he wouldn't bring the boom that saw house prices back change 10 prices. -20 percent per annum.
“A rate cut will do more to help cash flow, there is more stable softening in housing,” he said.
“If we saw that houses were suddenly increasing, then RBA should increase rates.” T
But REA chief economist, Nerida Conisbee, said that past experience showed that any cut in rates was associated with an injection in people who wanted to buy.
“We will not see the housing bubbles being reopened, but we will see an increase in activity,” said Ms Conisbee.
“The correlation between rates and clicks (from buyers on the REA website) is very high and we know that people looking for housing respond very positively to a cut in the rate.” T
AMP's chief economist and head of the investment strategy told Shane Oliver at News.com.au that a break in the rate is unlikely to increase prices.
“I would suspect that nothing of a property boom would do as it did back in 2011,” said Mr Oliver.
“Household debt is much higher so you may not see the same boost the last two times.
Mr Oliver recently revised his earlier prediction of a 20 per cent reduction to a 25 per cent reduction.
REA uses different measures of house prices than CoreLogic. They show a decline in prices, but they have not been marked with CoreLogic.
Ms Conisbee said she was clear that prices were going far, but that things were “looking more positive now than they were six months ago”. He said that the market direction depended on the outcome of the election.
CoreLogic's head of research, Tim Lawless, said it was unlikely that any cut in the rate would increase to increased borrowing, given the higher rates on which many lenders were assessed.
“Although you can get a mortgage about 4 per cent or even lower, lenders will still assess affordability at 7 per cent or higher,” said Mr Lawless.
“It's a big barrier for many borrowers, as well as raising a deposit.” T
Mr Lawless said the fall in Sydney and Melbourne had been steeper than expected, and the areas considered safe were beginning to feel the pinch.
“Adelaide has turned a corner, showing negative movements over the last three months, Hobart and Canberra have slowed down, that's the impact of tighter credit,” he said.
“The top of the market shows a higher drop in values rather than an affordable end.” T
GOOD PRICE BOARD FOR NO ONE
Many experts agree that returning to a period of extreme price jumps would be bad for Australia, but that their price is also expensive.
“This is the change that is important, that the rise in prices has helped to support the economy, people were feeling richer rather than the change,” he said. Mr Koukoulas.
“It's more significant than that, people who borrowed at the top or adjusted their spending patterns because their house is $ 1 million but are now worth $ 875,000 affecting feeling.” T
Ms Conisbee said that stability in the market is what we need.
The message being told is that strong growth is good and deterioration is bad and it always wins and loses in both situations, ”he said.
“It's not of interest to anyone when it rises by 10 per cent a year.” T