Australian Home Prices Set for Record Decline, Capital Economics Says
Capital Economics says Australia's housing slump will likely be the first in modern history with falls of at least 10%, as sales and auctions weaken.
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what happened
Marcel Thieliant, head of economics in Asia at Capital Economics, now sees it as highly probable that the present slide in Australian property prices will become the first in the country's modern era to end with a fall of at least 10%. According to Market Talk, home sales have dropped back to levels last seen in late 2022, pointing to weak demand.
Auction clearance rates also signal rapid price declines. Even after this year's softness, housing affordability remains extremely stretched. Thieliant also noted that budget changes introduced in May have hit investor purchasing considerably.
why it matters
A deepening property slump matters for Australian banks, which hold large mortgage books, and for household spending, which feeds into expectations for monetary policy and the Australian dollar. The drop in investor demand is a particularly visible part of this picture.
market impact
Australian banks and AUD: a weaker housing market and softer investor demand pressure lending and sentiment
- Australian banks pressure down — weak mortgage demand and falling property prices limit lending income
tags
instruments
sources
- Australian House Price Slump Likely to Post Records — Market Talk, 2 November 2026 at 02:27 UTC
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