Money: Australia's house price downturn is now the largest on record - - PressFrom - Australia
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MoneyAustralia's house price downturn is now the largest on record

03:05  06 june  2019
03:05  06 june  2019 Source:   businessinsider.com.au

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Australia ' s housing market downturn , already one of the longest and largest on record , has slowed in recent months. While the downturns in Sydney and Melbourne are now either the largest or In Melbourne, median prices have also skidded by 9.6% from November 2017, leaving this downturn

Sky Australia Finance. Median home prices have now fallen 8.2% in nominal terms, surpassing the previous record decline seen in the early 1980 s .

Australia's house price downturn is now the largest on record© Getty Wheee....

    Australia's house price downturn is now officially the largest on record.

    Following 20 months of consecutive declines, including another 0.4% fall in May, according to CoreLogic data, prices have now fallen a cumulative 8.2%, surpassing the previous record downturn seen in the early 1980s.

    This chart from UBS shows that not only is the decline in nominal terms now unprecedented, it's also one of the longest on record, only beaten by those seen earlier this decade and the early 1990s, before Australia's last recession hit.

    Australia's house price downturn is now the largest on record© Supplied

    "The peak-to-trough decline in prices is now 8.2%, officially the worst ever on a national basis since at least 1980 and the largest in around 50 years based on city-level REIA data," said George Tharenou, economist at UBS, in a note released on Monday.

    'Within months': Macquarie believes Australian house prices could increase far sooner than many think

    'Within months': Macquarie believes Australian house prices could increase far sooner than many think Australia's housing market downturn, already one of the longest and largest on record, has slowed in recent months. Median prices nationally fell 1% in January. In April, they declined 0.5%. It looks like they may fall around 0.4% in May, according to recent data.

    Median home prices have now fallen 8.2% in nominal terms, surpassing the previous record decline seen in the early 1980 s . At 20 months, the current downturn is also one of the longest on record . UBS expects prices will eventually decline by 10% before stabilising, most likely later this year.

    * Australia ' s house price downturn is now officially the largest on record . * Median home prices have now fallen 8.2% in nominal terms, surpassing the previous record decline seen in the early 1980s. * At 20 months, the current downturn is also one of the longest on record .

    And Tharenou believes the current downturn has longer and further to fall yet, forecasting that prices are likely to fall close to 10% peak-to-trough before eventually bottoming out, most likely at towards the end of this year.

    Unlike some other prominent property forecasters who expect a modest rebound in prices in the near-term, Tharenou remains unconvinced given weak economic conditions and the likelihood of higher unemployment ahead.

    "Given the real economy keeps getting weaker -- which is likely to see unemployment gradually trend up ahead -- we still don't expect a sharp reflation of housing in the near-term," he said in a note released on Monday.

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    The current downturn is now one of the largest on record , only surpassed by a handful of periods in the late 1800 s and the first half of the 20th century. It also rivals or has exceeded some of the declines seen in overseas markets during the GFC. The family home is the largest store of wealth for most

    The current downturn is now one of the largest on record , only surpassed by a handful of periods in the late 1800 s and the first half of the 20th century. It also rivals or has exceeded some of the declines seen in overseas markets during the GFC. The family home is the largest store of wealth for most

    Nor does he expect the combination of lower mortgage rates and likely easing in lending standards from APRA to offer any significant support to prices.

    'Scomo effect': House prices tipped for huge spike by July

    'Scomo effect': House prices tipped for huge spike by July Australia’s housing market downturn is coming to an end, with leading economists predicting a spike in house prices as soon as July. Property prices fell one per cent nationally in January, with CoreLogic data showing a smaller decline of 0.5 per cent in April – a result tipped to be repeated for May. It comes after Commonwealth Bank's incoming, home loan applications jumped to a 10-month high and strong predictions of interest rates cuts.

    Macquarie Bank says the downturn in Australia ' s housing market will be larger than it first thought, with price declines of between "Fast forward to now and it’s becoming clear that the extent of price declines is likely to be even larger . "The overall decline is now likely to approach 10% the largest

    House prices : Australia ' s property market facing longest downturn in decades. Conisbee said in Sydney the market seems to be diverging between premium property and affordable property, while those in the middle which were neither cheap nor particularly attractive were suffering the most.

    "There has not yet been any actual change in serviceability and borrowing capacity, so any lift in demand is sentiment," he said, referring to recent reports of a lift in mortgage applications at lenders.

    "There are still headwinds from tight credit dues to higher HEM [Household Expenditure Method] benchmarks and increased verification of living expenses, along with the roll out of Comprehensive Credit Reporting and potential Debt-To-Income limits."

    While national prices have fallen 8.2% in average weighted terms from the peak, the scale of declines have not been evenly distributed across the country, falling heavily in Sydney and Melbourne, and in the mining capitals, Perth and Darwin, but not in other locations.

    NOW READ: 'Within months': Macquarie believes Australian house prices could increase far sooner than many think

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