Australia: Strengthening dwelling price recovery – Westpac

Matthew Hassan, senior economist at Westpac, suggests that the recovery in Australian dwelling prices that began in mid-2019 accelerated in the final quarter, sustaining a robust pace into year end.

Key Quotes

“The CoreLogic home value index, covering the eight major capital cities, rose 1.2% in the Dec month following a very strong 2.0% gain in Nov and a 1.4% rise in Oct, giving a 4.7% gain for the final quarter. Prices rose 3% for the year as a whole – a 7% rebound in the second half more than offsetting a 3.8% decline in the first.”

“Prices nationally have recovered just over half of the 2017-19 correction. They are still 3.9% below their 2017 peak but at the current pace will regain that level by mid-2020.”

“Several factors contributed to the turnaround in 2019 including: reduced uncertainty around housing-related tax policy following the Federal election; 75bps in official rate cuts from the RBA; and some easing in regulatory guidelines around loan serviceability assessments.”