- Australian home prices are likely to fall another 5-10% this year driven by a further 15% or so fall in Sydney & Melbourne. Tight credit, rising supply and falling price expectations are the main negatives.
- Uncertainty around the impact of possible tax changes is likely also impacting investor demand.
- The housing downturn will be a significant constraint on Australian growth. We expect the RBA to cut the official cash rate to 1% this year.