Australia housing downturn - how bad will it get?

Please click the link below to read Shane Oliver's views on the falling home prices in Australia, and how bad it could get.

Main points raised are:

  • Australian home prices are likely to fall another 5-10% this year driven by a further 15% or so fall in Sydney and Melbourne.
  • Tight credit, rising supply and falling price expectations are the main drivers.
  • Uncertainty around the impact of possible tax changes is likely to impact investor demand.
  • The housing downturn will be a significant constraint on Australian growth.
  • We expect the RBA to cut the official cash rate to 1% this year.