According to News.com, some economists and analysts believe that the housing prices are booming in Australia and is already at its peak, while some say that there is a forthcoming recession.
So Macquarie, an Investment bank, gave a heads up that home prices are set to fall by 7.5 percent beginning March 2016. However, it was also said that a recovery is foreseen in the second half of 2017. As one analyst is reported to have said on a note last Monday, "Credit growth, auction clearance rates, house prices, settlement volumes and the dollar value of settlements are all showing signs of slowing, albeit from lofty levels.
"Our economics team are forecasting quarter-on-quarter house prices to fall from the March 2016 quarter before beginning to recover from June 2017, with a 7.5 per cent fall from peak to trough."
As a result, Macquarie believes that Reserve Bank may be obliged to lower rates "by a further 25 basis points to support demand and prices," according to News.com.
Bank of America Merrill Lynch is reported to share the same argument adding that, "We are not forecasting collapse or the bursting of any perceived bubble," it said in a note last Monday. "That said, it is not difficult to envisage a more hard landing scenario in the property market. This would clearly have a greater negative macroeconomic impact channelled through households and the residential construction cycle."
Do you think another recession or bubble is about the hit the property market?
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