This article looks at the main issues around the Australian housing market with the key points being as follows:
- The Sydney and Melbourne property markets have hotted up again and high house prices and household debt leave Australia vulnerable. But a property crash remains unlikely.
- Expect average home prices to fall 5-10% once an interest rate tightening cycle gets underway in 2018-19. Sydney and Melbourne unit prices are most at risk.
- More macro prudential measures to slow property demand are likely on the way. Alleviating poor affordability over the long term is best addressed by bossting supply.