The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Untitled design (8)
FIRST RELEASE TICKETS ON SALE FOR URBANITY-25 CONNECTING PROPERTY LEADERS ACROSS THE ASIA PACIFIC
FIRST TICKETS ON SALE FOR URBANITY-25 WHERE THE PROPERTY INDUSTRY CONNECTS
SEE DETAILSDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Partner Lab
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ConstructionAna NarvaezWed 13 Feb 19

House Prices to Fall 20% in Sydney, Melbourne: UBS

TUD+ MEMBER CONTENT
033a2943-9c03-417b-9c9c-0860891e4073
SHARE
39
print
Print

Dismal home lending figures and falling house prices has prompted investment bank UBS to downgrade its outlook on Australia’s property market, indicating national peak-to-trough falls of 14 per cent.

UBS analysts had previously predicted declines of 10 per cent. The forecast of a 14 per cent decline in house prices is set “even assuming the RBA cuts” and represents a doubling of the 7 per cent slump experienced thus far.

Tuesday’s ABS figures showed a near 20 per cent drop over the year, with investor loans down 47.8 per cent from its April 2015 peak.

Owner-occupier lending experienced a yearly decline of 16.2 per cent, while loans to investors fell 27.8 per cent.

“Worryingly, even first home buyers retracted sharply after previously recovering [albeit] holding a 16 per cent share of total loans, the highest since 2012.”

The home loan lending data is the worst since the global financial crisis.

Related: Reserve Bank Eyes Cash Rate Cut

UBS economists said that the RBA will cut rates this year to deal with the major declines in home loans.


UBS said the royal commission made no material change to its forecast.

“The key lead indicator of our credit tightening thesis and home prices is home loans,” the economists wrote.

“December ’18 [figures] slumped a worse than expected 5.9 per cent month-on-month, [t]o the lowest level in five years.

“Separately, the trend of developer loans declined 25-30 per cent year-on-year, to the lowest level since 2014, but recent stability is a mixed sign for building approvals.

UBS echoed AMP and ANZ forecasts that Sydney and Melbourne declines will be closer to 20 per cent.

Reserve bank governor Philip Lowe was quick to point out last week that house prices in Sydney are still 75 per cent higher than a decade ago, while Melbourne prices are 70 per cent higher.

ResidentialAustraliaFinancePolicyReal EstateSector
AUTHOR
Ana Narvaez
The Urban Developer - Editorial Director
More articles by this author
ADVERTISEMENT
TOP STORIES
Exclusive

Gold Coast’s Greatest Moments Yet to Come: Evan Raptis

Phil Bartsch
7 Min
MODEL founder Rory Hunter HERO
Exclusive

‘It’s Massive’: On Mission to Prove BtR Green Equals Gold

Leon Della Bosca
8 Min
Potts Point Coliving EDM
Exclusive

Co-Living Shrugs Off Stigma as Overseas Money Moves In

Clare Burnett
6 Min
Bankstown cbd in Sydney NSW EDM
Exclusive

Breaking Delivery Crisis Chokehold on NSW’s Biggest Housing Market

Vanessa Croll
7 Min
Healthscope Hospital EDM
Exclusive

‘Once-in-a-Decade’ Opportunities Rise in Wake of Healthscope Collapse

Clare Burnett
7 Min
View All >
Residential

Villawood Breaks Ground on Debut Redland Bay Project

Lindsay Saunders
Fieldwork and MALA's rendering of the mixed-use project by MAKE next to Murrumbeena Train Station in Melbourne's southern suburbs.
Affordable & Social Housing

Murrumbeena Scheme Wins Minister’s Backing

Marisa Wikramanayake
Sponsored

Innovation That Works: Solving Real-World Fitout Challenges

Partner Content
Smarter specs, faster rollouts—Criterion leads Australia’s fitout innovation with proven acoustic and compliance perform…
LATEST
Residential

Villawood Breaks Ground on Debut Redland Bay Project

Lindsay Saunders
2 Min
Fieldwork and MALA's rendering of the mixed-use project by MAKE next to Murrumbeena Train Station in Melbourne's southern suburbs.
Affordable & Social Housing

Murrumbeena Scheme Wins Minister’s Backing

Marisa Wikramanayake
2 Min
Interiors

Innovation That Works: Solving Real-World Fitout Challenges

Partner Content
3 Min
Rose Bay supersite EDM
Residential

How 12 Eastern Sydney Homes Became a $165m Supersite

Vanessa Croll
4 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/house-prices-to-fall-20-in-sydney-melbourne-ubs-