| Australia’s housing market is heading for its biggest downturn in 4 decades |
** Experts warn that if rates remain high, the country could face a broader property slump
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Australia’s housing market is heading for its biggest downturn in 4 decades
12/05/2026
See translation in Arabic section)
Sydney-Middle East Times Int'l: Australia’s housing market is facing its largest correction in 40 years, driven by rising interest rates, increasing supply, and a weakening jobs outlook. Former Treasury economist Leith van Onselen warns that these factors, along with the Reserve Bank of Australia’s (RBA) hawkish stance on inflation, are creating a “perfect storm” for property prices.
The RBA recently raised the cash rate to 4.35%, the third hike this year, with markets anticipating at least one more increase. Analysts predict Australia could mirror declines seen in New Zealand and Canada, where house prices have dropped around 20%.
Experts like Catherine Cashmore foresee not only falling property prices but also a potential recession, marked by business closures and stock market volatility. AMP economist Shane Oliver notes that price growth has slowed to 0.3% in April, with major cities showing differing trends—Sydney and Melbourne are already seeing declines, while mid-sized cities like Brisbane, Adelaide, and Perth are slowing.
Domain chief economist Nicola Powell highlights that Sydney and Melbourne are the most sensitive to rate changes, with Sydney prices stagnating and Melbourne experiencing its first decline in 1.5 years, signaling the housing market’s vulnerability to borrowing conditions. |
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