The Australian national house price index will fall by 5.3% in 2022, the largest annual decline since the financial crisis.

(Bloomberg file photo)

[Financial Channel/Comprehensive Report] As the central bank's expansion of interest rate hikes weakens purchasing power and deters investors, the Australian real estate market will experience the largest single-year decline in 2022 since the 2008 global financial crisis.

"Bloomberg" reported that according to a report released by real estate consulting agency CoreLogic on Tuesday (3rd), Australia's national house price index (Home Value Index) will fall by 5.3% in 2022, which is the first time the data has fallen since 2018. .

On a city-by-city basis, Sydney saw the biggest annual drop, plunging 12.1 per cent, followed by Melbourne, which fell 8.1 per cent.

In December alone, house prices across Australia fell by 1.1%.

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CoreLogic research director Tim Lawless said house prices were likely to fall further in the first few months of 2023 before stabilizing after policy rates peaked.

CoreLogic pointed out in the report that although many regions of Australia are in a downturn, overall house prices are still well above pre-epidemic levels.

The Reserve Bank of Australia (RBA) has raised interest rates by 3 percentage points to 3.1% since May 2022, and it is widely expected that the bank will raise interest rates 1-2 times this year.

Reserve Bank of Australia officials have generally expressed confidence in the domestic housing market, stressing that prices are still higher than they were at the start of the pandemic.

Bloomberg Economics economist James McIntyre said the lagging effects of rate hikes, including an expected hike in February, should continue to weigh on markets.

House prices are expected to bottom out in mid-2023 once the RBA pauses its tightening cycle.

Australia's A$9.4 trillion (about NT$196 trillion) real estate market hit a recent high in April 2022 after surging 28.6 percent from the pandemic downturn, CoreLogic said, before falling 8 percent since then.

House prices are likely to stabilize as interest rates peak and inflation slows, but whether there is a broad rise in house prices will depend on lower interest rates or other forms of stimulus, the report said.

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