Australia Macro Service > Australia Research Briefings
Housing markets in the east coast capital cities have cooled significantly over the past year. Median house price in Sydney and Melbourne have declined by 18% and 15% from their peaks, respectively.
Building approvals and commencements have also weakened significantly in recent quarters, but the impact from a downturn in dwelling investment is yet to be fully realised. We forecast a detraction of 0.6%pts from GDP in 2019 and 0.5%pts in 2020.
Given the current stage of the housing market cycle, we do not expect lower interest rates to have a marked impact on residential construction. Property market yields are low, and households are already highly leveraged, and facing subdued income growth.
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