subscribe to our newsletter sign up

What slowing house prices could mean for investors

Property prices, House prices, investment property, owner-occupier, retirement planning AMP Capital, Diana Mousina, UBS, Jonathon Mott,

Many Australian investors have benefited immensely from growth in the value of their house, but the current economic environment could see those gains tempered in the coming years, two global investment managers have cautioned.

In the three months leading to July 2017, house prices in Sydney and Melbourne climbed 2.2 and 4.1 per cent respectively, with the number of properties bought at auctions settling in the mid-70 per cent range, according to Jonathan Mott, an analyst with UBS.

While these figures suggest a degree of resilience in the market, Mr Mott noted there had been a “moderate” slowdown already and reiterated UBS’s stance that Australia’s housing market has reached its top.

Diana Mousina, an economist at AMP Capital, shares Mr Mott’s opinion that housing price growth will slow in the coming years as “new supply flows into the market, mortgage rate hikes start to bite, affordability pressures build and sentiment towards housing turns more negative”.

This poses a risk for many Australians, as the skyrocketing housing prices have helped home owners build their wealth and given them more confidence to dip into their savings to make purchases and spend more freely, Ms Mousina said.

Ms Mousina expects national house prices will decline between 5 and 10 per cent at some point in the next two years, which will likely reduce the amount of consumer spending within the Australian economy.


What slowing house prices could mean for investors
nestegg logo
Promoted Content
Recommended by Spike Native Network
Anonymous - Can anyone please explain - if I were a Board/CEO of a public company (apparently quite a high risk occupation from now on), why not just declare.......
Anonymous - Hear hear!....
Anonymous - Easy to 'slam' figures and yet proffer none yourself, Bowen.

Rather than being boorish, before proposing such radical reforms, surely an in depth.......
Anonymous - While not defending the adviser in this case, as he should have run a mile as soon as he heard the goals, this woman would have been working until 80.......