Dow Jones Newswires: Australian home prices see record decline, further falls expected

by | Jan 9, 2023 | Stock Market

SYDNEY–Australian home prices have experienced their largest recorded decline, with further falls expected in the coming months should the central bank lift interest rates more. Home values on January 7 were 8.4% below their peak on May 7, said property data company CoreLogic.

“The result takes the national housing downturn into new territory, breaking the previous record in peak-to-trough declines, when home values fell 8.38% between October 2017 and June 2019,” said Eliza Owen, CoreLogic Australia’s head of research. The Australian housing market is likely to remain soft, with the central bank signaling it isn’t yet done raising rates. The Reserve Bank of Australia last month increased rates to 3.1% and said it expects to increase them further, although it isn’t on a preset course. It began raising rates in May, rolling back emergency measures introduced in response to the Covid-19 pandemic, which included a record-low cash rate of 0.1%. Investors expect a peak in the underlying cash rate of around 4.0%, while the median forecast from Australian economists is lower at 3.6%, CoreLogic said. Many borrowers have yet to feel the full impact of higher borrowing costs because they locked in fixed-rate mortgages during the pand …

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