HSBC expected Australian home prices to fall up to 6% over the next two years as the country's housing market sees effects of soft investor demand and new tax policies, according to a Friday Australian Financial Review report, citing HSBC Chief Economist Paul Bloxham.
Bloxham expects national home prices to decrease in the second half of the year, with year-on-year growth to close flat as the Reserve Bank of Australia's cash rate hikes are already feeding through to softer conditions, the report added.
HSBC sees home price declines continuing in the following year and expects a decrease of 2% to 6% year-on-year in 2027.
According to the AFR report, HSBC also warned that falling prices are increasing financial strain on households and mortgage holders, but added that the banking system remains well capitalized and housing-related leverage is still supported by low levels of negative equity.
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