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Think a rate cut will stimulate housing growth? Think again

RBA and suburbs

Rate cuts have previously triggered an upswing in housing prices, but one of the nation’s top economists doesn’t think that’ll be the case this time around.

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>Economists are now predicting the next cash rate move will be a cut, according to a recent Finder survey – some believe there could be two rate cuts before year end.

“With the housing market continuing to tumble, and other global and international economic factors looking grim, experts seem to be sure we’re looking at at least one cut in 2019, if not two,” said Graham Cooke, insights manager at Finder.

However, for AMP Capital chief economist Shane Oliver, a rate cut might not stimulate the housing market in Australia.

“Melbourne prices have come down by around 10 per cent. Like Sydney, I think they will come down by 25 per cent as well, so they’re not quite halfway through the downturn,” he said.

Over the 12 months to January this year, national property values declined by 5.6 per cent.

This drop represents the largest since early 2009, which was the height of the global financial crisis.

 

Think a rate cut will stimulate housing growth? Think again
RBA and suburbs
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