Mini-market 2020: Housing market is on the rise with interest rates set to fall
Share this article Share The Australian Bureau of Statistics said housing prices increased 2.5 per cent last month, compared with 2.1 per cent in March and 2.0 per cent a year ago.
However, this was less than the average of 4.1 to 5.2 per cent increase seen across the Australian economy.
“Housing markets continue to be a source of uncertainty for Australians,” the ABS said.
“The ABS has recently revised the outlook for Australian housing, and is forecasting a 2.4 per cent growth in house prices over the next year, the lowest growth seen since May 2016.”
This is partly due to strong demand from overseas, which is expected to continue to build over the coming years.
The ABS said there were 1.2 million fewer homes in the country in March than in March last year.
“This reflects a stronger than expected increase in demand for housing in Australia, as new construction in Australia is underpinned by overseas investment,” the report said.
Key points: The ABS predicts prices will fall by 5 per cent this year due to the impact of the mortgage rate drop and the Reserve Bank’s rate cut, and will fall again in 2020, if interest rates remain at current levels (ABC News) The Australian economy contracted by 0.7 per cent from April to May and by 2.3 per cent for the whole of 2020.
It was the first decline in the quarterly growth rate since the third quarter of 2019.
The growth rate was down from the 2.7 percent growth seen in the previous three months.
The Reserve Bank cut interest rates to record lows in April and May, which led to a boom in house construction.
It is hoped the impact will help keep prices down for many people, and provide a boost to the economy.
“The current housing market outlook is challenging for many Australians, with the Australian Bureau on average forecasting an 8.5-per-cent decline in house price growth in 2020 compared with the current trend of 7.8 per cent,” the survey said.
The survey found a sharp increase in the number of people who said they were living in temporary accommodation, with 2 per cent of people saying they were in temporary housing in the month of May.
It said that was a rise of 5.5 percentage points on the previous quarter.
The average temporary accommodation is one person and a family of three.
More to come.
Topics:housing-industry,housing,business-economics-and-finance,consumer-fraud,financial-markets,government-and_politics,australiaFirst posted May 05, 2020 14:53:21Contact Greg McNeilMore stories from New South Wales