Property prices dropped further in September and falls ‘could accelerate’ again with rate rise
Australia’s property prices fell another 1.4% in September as the cost of borrowing increased, and another interest rate rise is likely after Tuesday’s Reserve Bank meeting.
The recent declines are chipping away at the huge property price increases that followed the troughs during the pandemic.
Last month’s drop in CoreLogic’s home value index was less than the 1.6% fall in August but the pace of declines could quicken again if the RBA’s key interest rate keeps rising, said Tim Lawless, the data group’s research director.
<p lang=«en» dir=«ltr» xml:lang=«en»>Australia's house prices continue to tilt lower, with @corelogicau's home values index down 1.4% in September alone, moderating from August's 1.6% fall. pic.twitter.com/FfUnhIV1yC“It’s possible we have seen the initial shock of a rapid rise in interest rates pass through the market, and most borrowers and prospective homebuyers have now ‘priced in’ further rate hikes,” Lawless said. “However, if interest rates continue to rise as rapidly as they have since May, we could see the rate of decline in housing values accelerate once again.”
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Investors are betting the central bank board will hike the cash rate another 50 basis points on Tuesday, marking the fifth such rise in as many months. If the rate is lifted to 2.85%, it would be the fastest increase since a similar 275-basis-point increase between August and December 1994.
<p lang=«en» dir=«ltr» xml:lang=«en»>Ahead of another RBA board meeting on Tuesday, investors are forecasting a 5th 50bp rise in a row in the cash rate, bringing it to 2.85%. That would be the highest since May 2013. Looking ahead, they are betting it will top 4% in Read more on theguardian.com
