Invest
International Monetary Fund shares outlook for Aussie markets, housing
Invest
International Monetary Fund shares outlook for Aussie markets, housing
The strength of Australia’s economy puts it in good stead to weather the drop-off of the housing market, according to the International Monetary Fund.
International Monetary Fund shares outlook for Aussie markets, housing
The strength of Australia’s economy puts it in good stead to weather the drop-off of the housing market, according to the International Monetary Fund.
Preliminary findings released on Tuesday from IMF staff’s official visit to Australia state that the slump in the housing market can be withstood against a backdrop of strong economic growth, “well above 3 per cent in 2018”.
Such growth is anticipated to continue in the near future, despite the softening in housing investment, as high employment rates will see private consumption growth remain strong and investment in non-mining private business and public services continue.
Although the housing market downturn is identified as a source of risk, the IMF said the drop-off is within expected levels.
“Under the baselines outlook, the housing market correction remains orderly, reflecting a combination of continued strong underlying demand for housing in the context of population growth and no significant oversupply, the presence of other strong growth drivers, and a resilient bank sector continuing to extend credit to support economic growth,” it stated.
It is suggested that the slowdown may, rather, be viewed as welcome respite to buyers through improving housing affordability across the board. However, the IMF indicates that housing reforms will still be “critical to restoring housing affordability”.
“In the absence of a sharp rise in unemployment, interest rates, or housing inventories, an orderly correction in housing prices will help contain macro-financial vulnerabilities. Pressures on housing affordability, which is critical for growth to remain inclusive, will be relieved in the process,” it said.
Nonetheless, the statement did highlight China’s weaker-than-expected economic outlook, coupled with rising global protectionism and trade tensions, as having the potential to “amplify the correction” in the housing market and “lower domestic demand”.
“A sharp tightening of global financial conditions could spill over into domestic financial markets,” it stated.
According to the IMF, this could result in rising funding costs and a reduction in disposable income for individuals with debts, “depending on the response of the Australian dollar”.
Cash rate remains appropriate
In light of wages remaining stagnant and inflation still sitting below target range, the IMF stated that the Reserve Bank of Australia’s policy of keeping the cash rate on hold at 1.5 per cent is “appropriately accommodative”.
“Notwithstanding recent strong growth, it is not yet the time to withdraw macroeconomic policy support given remaining slack,” it said in its report.
The IMF appeared broadly to agree with the RBA that the next move will be a hike, however that will be some time away.
“Given the fiscal space, Australia remains in a position to respond flexibly in case large downside risks should materialise. A role for medium-term debt anchors as a complementary element in fiscal strategies might also be considered,” it stated.
Property
RBA’s 30% property growth forecast to materialise in 75% of regions
Experts believe that RBA’s forecasted 30 per cent growth in property prices over the next three years will materialise in 75 per cent of Aussie regions. ...Read more
Property
HomeBuilder applications soar as first-timers enter the market in record numbers
Record numbers of first home buyers are coming into the market assisted by the government’s HomeBuilder stimulus, which is expected to help spur $50 billion in economic activity. ...Read more
Property
Dual Occupancy Homes – Why They Are A Smart Investment In The Current Market
Promoted by Metricon ...Read more
Property
4 factors affecting property market trends in 2021
Following a tough 2020, property investment activity is expected to rebound strong, expanding by 50 per cent in the second half of 2021. ...Read more
Property
House prices tipped to surge 30% on the back of cheap money
According to new documents released from the Reserve Bank of Australia, persistently low interest rates could push up property prices by as much as 30 per cent. ...Read more
Property
Double-digit price growth to stick around as ‘property boom’ arrives
According to leading indicators, Australia’s property boom officially began in November, following several slow months on the back of the COVID crisis, with double-digit price growth already logged ...Read more
Property
How to turn your ‘costly’ lifestyle investment into a money-making asset
Emotionally driven holiday home buyers are being advised to seek maximum rental income and depreciation benefits to make their investments viable. ...Read more
Property
Dutch e-commerce giant VidaXL ramping up Australian operations
Netherlands-based online retailer VidaXL is ramping up its operations in Australia, by launching the build of a brand new 81,000 sq m national distribution centre in Melbourne. ...Read more
Property
RBA’s 30% property growth forecast to materialise in 75% of regions
Experts believe that RBA’s forecasted 30 per cent growth in property prices over the next three years will materialise in 75 per cent of Aussie regions. ...Read more
Property
HomeBuilder applications soar as first-timers enter the market in record numbers
Record numbers of first home buyers are coming into the market assisted by the government’s HomeBuilder stimulus, which is expected to help spur $50 billion in economic activity. ...Read more
Property
Dual Occupancy Homes – Why They Are A Smart Investment In The Current Market
Promoted by Metricon ...Read more
Property
4 factors affecting property market trends in 2021
Following a tough 2020, property investment activity is expected to rebound strong, expanding by 50 per cent in the second half of 2021. ...Read more
Property
House prices tipped to surge 30% on the back of cheap money
According to new documents released from the Reserve Bank of Australia, persistently low interest rates could push up property prices by as much as 30 per cent. ...Read more
Property
Double-digit price growth to stick around as ‘property boom’ arrives
According to leading indicators, Australia’s property boom officially began in November, following several slow months on the back of the COVID crisis, with double-digit price growth already logged ...Read more
Property
How to turn your ‘costly’ lifestyle investment into a money-making asset
Emotionally driven holiday home buyers are being advised to seek maximum rental income and depreciation benefits to make their investments viable. ...Read more
Property
Dutch e-commerce giant VidaXL ramping up Australian operations
Netherlands-based online retailer VidaXL is ramping up its operations in Australia, by launching the build of a brand new 81,000 sq m national distribution centre in Melbourne. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
