RBA rate hike threatens biggest housing downturn in 70 years
A fourth Reserve Bank rate rise could trigger a 13% housing downturn, the worst in seven decades.
Independent housing economist Cameron Kusher is forecasting a 13% national housing downturn, which would be worse than the 7.7% drop in 1982-83 and the 8.2% fall in 2017-19. Each Reserve Bank rate hike since February has cut borrowing power.
A single earner loses $47,400 in borrowing capacity with a fourth hike. A couple earning together loses $94,700.
Rate rises and Labor's changes to negative gearing and capital gains tax are driving the downturn. Property prices have already fallen 7.1% in Sydney since peaking in February.
Lower borrowing capacity is shifting demand toward cheaper homes around $769,000, while expensive properties worth $1.34m face steeper declines.
- 13% nationally
- Forecasted downturn
- 47,400 dollars
- Single earner capacity loss
- 94,700 dollars
- Couple capacity loss
- 7.1%
- Sydney price fall since peak
Why it mattersIf rates rise further, homebuyers can afford significantly less, prices may fall more, and the housing market faces its sharpest contraction in generations.
AustraliaAustralian borrowers face shrinking purchasing power, property values are falling, and the dream of home ownership is slipping further for many first-time buyers.
Corroborated by7news.com.au
✓ Claims checked against the source. checked 2 h ago
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