ABC News Daily Why house prices are starting to fall
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Nov 3, 2024 Ian Verrender, ABC’s Chief Business Correspondent, offers insights into the shifting dynamics of Australia's housing market. He highlights the impact of interest rate hikes since May 2022, leading to slight price drops in Sydney and Melbourne. Despite this, many prices remain near record levels. Verrender discusses how population growth affects demand and the affordability crisis faced by buyers. He warns that future interest rate cuts could spark renewed demand, possibly driving prices up again, making the housing landscape a complex one.
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Australian House Price Trends
- Australian house prices have consistently risen over the long term, sometimes flatlining before doubling rapidly.
- This historical trend contributes to the expectation that house prices will always go up.
Current Housing Market
- Despite recent declines, house prices remain near record levels in many areas.
- The market is split, with some cities like Perth experiencing significant growth while others soften.
Housing Affordability Crisis
- Housing affordability is at its worst due to high prices, reduced disposable income, and increased interest rates.
- These factors outweigh the marginal price drops in some areas.