Australian home prices are at risk of falling more than 10% in 2019, according to Citi Research. It says the downturn has been driven by tighter lending standards, less foreign buyer activity and a strong pipeline of new housing supply. Given Australia has an outsized share of residential investment relative to GDP, it says a downturn of this scale will increase the risk of negative spillover effects into other parts of the economy. Weak new car registrations and slumping building approvals suggest the downturn is already dragging on key parts of the economy. Australian home prices are at risk of falling more than 10% in 2019, the largest decline globally of all markets monitored by Citi Research. “Among the roughly 60 economies under coverage, only 11 are at significant risk of notable home price falls over the next 12 months, and only one — Australia — might experience year-on-year declines exceeding 10%,” Citi says. Citi says the downturn underway has been caused by several factors, nominating the impact of tighter macroprudential lending standards, reduced foreign buyer activity and a steep increase in new housing supply. “Where prices have been rising rapidly for several years, including in Australia, authorities have deployed… Read full this story
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