Invest
The one thing halting a property decline
There’s one thing keeping housing prices from going down, but it’s not something that everyone knows about, an economist has said.
The one thing halting a property decline
There’s one thing keeping housing prices from going down, but it’s not something that everyone knows about, an economist has said.
According to Anthony Baum, economist and chief executive of home loan platform Tic:Toc, unemployment levels are key to house prices, with a rise in unemployment paving the way for house price falls.
“The reality is that homes to Australians are very important, we all need somewhere to live, and it is the thing that people will keep payments current on, even if they’re foregoing other parts of their family budget to accommodate them. If interest rates rise, and the economy may slow [down] as a result of rising interest rates,” Mr Baum told Nest Egg sister publication Smart Property Investment.
“For example, when interest rates rise, a greater proportion of household income [is] going into home loan repayments, but really, it’s unemployment that causes defaults because people are no longer able to actually make their payments.
“So, it’s a capacity to pay thing.”
At the moment, Mr Baum said it falls down to supply and demand; there are not enough new houses being built, which is why housing prices are still relatively high.
“Overall, what we’ve historically seen at least is that supply is less than demand over the long run, so they tend to rise and then they tend to plateau, and they tend to rise, and those rising spikes are more prevalent in certain states than others. They very rarely go backwards in real terms,” he said.
Mr Baum said interest rates are another obvious factor, “but I think they contribute more to stagnation in prices, maybe modest dips rather than outright significant falls”.
As opposed to rising unemployment figures and a lack of property supply, the combination of wage growth and tight supply result in rising property prices, Mr Baum said.
“A good example of that is the WA market through the mining boom, where you had both rapid population growth and rapid industry specific wage growth occurring in a market that saw strong demand outstrip supply, and in that scenario, prices rose relatively rapidly,” he said.
RELATED ARTICLES
Property
Multigenerational living is moving mainstream: how agents, developers and lenders can monetise the shift
Australia’s quiet housing revolution is no longer a niche lifestyle choice; it’s a structural shift in demand that will reward property businesses prepared to redesign product, pricing and ...Read more
Property
The new battleground in housing: how first-home buyer policy is reshaping Australia’s entry-level market
Government-backed guarantees and stamp duty concessions have pushed fresh demand into the bottom of Australia’s price ladder, lifting values and compressing selling times in entry-level segmentsRead more
Property
Property 2026: Why measured moves will beat the market
In 2026, Australian property success will be won by investors who privilege resilience over velocity. The market is fragmenting by suburb and asset type, financing conditions remain tight, and ...Read more
Property
Entry-level property is winning: How first home buyer programs are reshaping demand, pricing power and strategy
Lower-priced homes are appreciating faster as government support channels demand into the entry tier. For developers, lenders and marketers, this is not a blip—it’s a structural reweighting of demand ...Read more
Property
Scarcity premiums, squeezed yields: Australia’s housing bottleneck is rewriting investor strategy
Australia’s housing pipeline has thinned to a decade low, locking in a scarcity premium that narrows investor flexibility, compresses yields and extends hold periods. With only 172,000 dwellings ...Read more
Property
Australia’s housing bottleneck isn’t a demand problem — it’s a construction maths problem
The economics of building have broken for mainstream housing in Australia. Input costs, labour scarcity and approvals drag are collapsing project feasibility, tilting capital to luxury builds and ...Read more
Property
2026 property expansion? Why disciplined investors will wait — and where to play offence
A growing chorus of market practitioners is urging investors to pause portfolio expansion in 2026 as returns compress and policy settings tighten. The headline risk is less about price crashes and ...Read more
Property
Cost, red tape and capital: why Australia’s housing pipeline is shrinking — and how to rebuild it
Australia’s housing pipeline is being choked by a toxic mix of escalating input costs, regulatory drag and tighter finance. The result: mid-market projects stall while luxury builds proceed, pushing ...Read more
Property
Multigenerational living is moving mainstream: how agents, developers and lenders can monetise the shift
Australia’s quiet housing revolution is no longer a niche lifestyle choice; it’s a structural shift in demand that will reward property businesses prepared to redesign product, pricing and ...Read more
Property
The new battleground in housing: how first-home buyer policy is reshaping Australia’s entry-level market
Government-backed guarantees and stamp duty concessions have pushed fresh demand into the bottom of Australia’s price ladder, lifting values and compressing selling times in entry-level segmentsRead more
Property
Property 2026: Why measured moves will beat the market
In 2026, Australian property success will be won by investors who privilege resilience over velocity. The market is fragmenting by suburb and asset type, financing conditions remain tight, and ...Read more
Property
Entry-level property is winning: How first home buyer programs are reshaping demand, pricing power and strategy
Lower-priced homes are appreciating faster as government support channels demand into the entry tier. For developers, lenders and marketers, this is not a blip—it’s a structural reweighting of demand ...Read more
Property
Scarcity premiums, squeezed yields: Australia’s housing bottleneck is rewriting investor strategy
Australia’s housing pipeline has thinned to a decade low, locking in a scarcity premium that narrows investor flexibility, compresses yields and extends hold periods. With only 172,000 dwellings ...Read more
Property
Australia’s housing bottleneck isn’t a demand problem — it’s a construction maths problem
The economics of building have broken for mainstream housing in Australia. Input costs, labour scarcity and approvals drag are collapsing project feasibility, tilting capital to luxury builds and ...Read more
Property
2026 property expansion? Why disciplined investors will wait — and where to play offence
A growing chorus of market practitioners is urging investors to pause portfolio expansion in 2026 as returns compress and policy settings tighten. The headline risk is less about price crashes and ...Read more
Property
Cost, red tape and capital: why Australia’s housing pipeline is shrinking — and how to rebuild it
Australia’s housing pipeline is being choked by a toxic mix of escalating input costs, regulatory drag and tighter finance. The result: mid-market projects stall while luxury builds proceed, pushing ...Read more
