The most likely scenario according to our predictions is that Australian house prices will keep falling in the first half of 2019 before turning around and growing moderately, resulting in growth of about 1 per cent in 2019
In the middle of last year, several top economists were predicting house prices to in fact increase in 2018. forecasting as much as 9 per cent, but since then house prices have experienced their largest and longest peak to trough decline in recent history pushed on by increased housing affordability constraints.
The labour market has been improving and is projected to continue to do so. This should contribute to further moderate improvements in wage growth.
CoreLogic figures released earlier this month found values had dropped by 2.7 per cent across Australia in September, with Sydney home prices down 6.1 per cent and Melbourne down 3.4 per cent.But what people cannot lose sight of is the fact that say hypothetically prices do come down by 15 per cent for the five years prior to the point where it started to dip around 12 months ago, prices went up in Sydney by 60 per cent.
However the general agreement is that a 25 basis point rise is expected in February 2020. this means there will be an extra $58 per month payable for every 25 basis points based on a $400,000 loan.