news.com.au reports that house prices in Sydney and Melbourne have been tipped to fall by 15 per cent from peak to trough as the market continues to cool, with the risk of a “crash landing” driven by tougher lending standards.
The warning from AMP Capital chief economist Dr Shane Oliver came as the Reserve Bank left the official cash rate on hold at 1.5 per cent for the 23rd month in a row.
According to news.com.au, data released by research firm CoreLogic on Monday showed national house prices fell for the ninth consecutive month in June to be 1.3 per cent lower than their September 2017 peak.
“Overall, Sydney and Melbourne are likely to see a top to bottom fall of around 15 per cent spread out to 2020, but for national average prices the top to bottom fall is likely to be around 5 per cent,” Dr Oliver said.
“A crash landing is unlikely in the absence of much higher interest rates or unemployment, but it’s a risk given the difficulty in gauging how severe the latest tightening in bank lending standards in the face of the Royal Commission will get.”
source: news.com.au
