- Australian house prices are expected to fall, as rising interest rates put increasing cost pressure on households
- A Reuters poll, which surveyed 11 analysts, showed the expectation for an eight per cent drop in house prices next year
- A rise in borrowing costs is expected to dent housing activity, as it becomes more expensive for people to pay off loans
- Also weighing on the Australian economy is a lack of wage growth, with annual pay growth moving 2.4 per cent higher in the first quarter, representing half the amount of inflation.
Australian house prices are expected to fall, as rising interest rates put increasing cost pressure on households.
A Reuters poll, which surveyed 11 analysts, showed the expectation for an eight per cent drop in house prices next year.
Meanwhile, growth is expected to slow to one per cent this year, according to the median forecast.
This follows a period of a surging property market, spurred on by ultra low interest rates. Last year, Australian property prices surged 20 per cent higher.
However, a correction is in order, as the Central Bank has flagged the need for more rate hikes in order to curb inflation.
Earlier this month, the Reserve Bank of Australia lifted rates for the first time in over a decade to 0.35 per cent.
A rise in borrowing costs is expected to dent housing activity, as it becomes more expensive for people to pay off loans.
The central bank is due to meet next month on June 7.
Also weighing on the Australian economy is a lack of wage growth, with annual pay growth moving 2.4 per cent higher in the first quarter, representing half the amount of inflation.