{"id":611934,"date":"2026-09-02T05:42:25","date_gmt":"2026-09-02T05:42:25","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/611934\/"},"modified":"2026-09-02T05:42:25","modified_gmt":"2026-09-02T05:42:25","slug":"house-prices-could-fall-10-analysts-predict-as-fourth-interest-rate-hike-looms-housing","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/611934\/","title":{"rendered":"House prices could fall 10%, analysts predict, as fourth interest rate hike looms | Housing"},"content":{"rendered":"

The prospect of the steepest property market downturn in history will not stop the Reserve Bank from delivering a fourth interest rate hike as it battles to bring inflation back under control<\/a>, economists say.<\/p>\n

New data from Cotality revealed house prices are now falling in more than 90% of Australian suburbs, amid a perfect storm of higher borrowing costs, a weak economy, and a once-in-a-generation change in the tax treatment of property investors.<\/p>\n

Shane Oliver, AMP\u2019s chief economist, said average home values would continue falling for the next six to nine months, by which time property prices nationally would be about 10% down from their recent peak.<\/p>\n

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\u201cThat would be the worst in the postwar period,\u201d Oliver said, although the figure is not hugely out of line with previous property market corrections in the order of 8% \u2013 most recently in 2022-23.<\/p>\n

Prices nationally have dropped by less than 4% since their most recent peak \u2013 but are still about 3% higher than a year ago \u2013 while values in Sydney and Melbourne have experienced the biggest retreat of about 7% from their highs.<\/p>\n

In response to the evidence of a more rapid and wider decline<\/a>, CBA analysts predicted an eventual 12-13% drop in Sydney and Melbourne property prices alongside 8% falls in Brisbane, Perth and Adelaide.<\/p>\n

\u201cThe adjustment over the past three months has been larger and faster than we anticipated,\u201d CBA economists said.<\/p>\n

Even then, the losses will not put a dent in Australia\u2019s chronically unaffordable housing<\/a>, Oliver said.<\/p>\n

\u201cIn some ways this just takes us back to where we were a year ago for many cities across the country. And we were complaining about housing affordability then, so not much will change.\u201d<\/p>\n

Table showing the change in Australian home price values<\/a><\/p>\n

Michele Bullock, the Reserve Bank\u2019s governor, told reporters at her post-meeting press conference on 11 August that the housing market downturn was \u201cnot the main game\u201d when it came to rate decisions, and noted that property prices were still 50% higher than they were in 2020.<\/p>\n

Oliver said it was clear it would be a discussion point at upcoming RBA board meetings at the end of this month and in November.<\/p>\n

\u201cI think they will think twice but they\u2019ll continue to hike for the simple reason that the bigger problem right here, right now is inflation \u2013 and house prices have only just flicked off the top,\u201d Oliver said.<\/p>\n

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Jonathan Kearns, the chief economist at Challenger, agreed that the weakness in the property market would not be enough to prevent another interest rate hike, which, like Oliver, he believed would come at the meeting in early November.<\/p>\n

Kearns, a former senior RBA official, said while the property market correction was coming harder and faster than anticipated, \u201cit\u2019s not large enough for them to say we don\u2019t need to hike\u201d.<\/p>\n

Even as inflation remains too high for comfort, some experts warned that national accounts figures on Thursday morning could show the economy barely grew<\/a> through the three months to June.<\/p>\n

Belinda Allen, CBA\u2019s head of Australian economics, said she expected GDP to have expanded by just 0.1% in the most recent quarter, in what would be the weakest growth in two-and-a-half years.<\/p>\n

\u201cIf these numbers print as expected tomorrow [Thursday] it does show that the Australian economy<\/a> has slowed, but inflation has not,\u201d Allen said.<\/p>\n

\u201cRolling supply shocks, more Australians spending money domestically than offshore and weaker productivity growth are acting to keep inflation high and the RBA has more work to do.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The prospect of the steepest property market downturn in history will not stop the Reserve Bank from delivering…\n","protected":false},"author":2,"featured_media":611935,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-611934","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/611934","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=611934"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/611934\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/611935"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=611934"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=611934"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=611934"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}