The threat to Australian house prices

Dr Shane Oliver – Head of Investment Strategy and Chief Economist

AMP Capital

 

 

Key points
> The Australian housing market is at risk from the COVID-19 recession Australia has now entered.

> A relatively short recession that sees unemployment rise to around 7.5% would likely only set prices back around 5% or so after which prices would bounce back.

> But a deeper recession with say 10% unemployment risks tripping up the underlying vulnerability of the housing market around high prices and high debt levels. This could see a 20% fall in prices.

> This is not our base case, but it highlights the need for the Government & the RBA to minimise the fallout from COVID-19 shutdowns in terms of businesses and jobs.

The full article can be found here.

 

 

Important note: While every care has been taken in the preparation of this document, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds
Management Limited (ABN 15 159 557 721, AFSL 426455) make no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation,
any forecasts. Past performance is not a reliable indicator of future performance. This document has been prepared for the purpose of providing general information, without taking account
of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this
document, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This document is solely for the use of the party to whom it is provided.

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