Australian home prices continue to decline in August

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Australian national home prices fell for the fifth consecutive month in August, recording a 0.9 per cent decline following a 1.2 per cent drop in July. Property consultant Cotality reported that Sydney and Melbourne experienced the sharpest downturns, with prices in those cities falling by 1.4 per cent and 1.1 per cent respectively. This decline, which leaves prices approximately 7 per cent below their previous peaks, occurred as the Reserve Bank of Australia raised interest rates to combat stubborn inflation.

Consequences

The ongoing contraction in home prices is expected to erode household wealth and limit consumer spending, contributing to an overall economic slowdown. Economists forecast that the decline will likely continue, with total peak-to-trough price falls reaching 10 per cent before a potential turnaround in the second half of next year.

Sources

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