Australia's housing market is cooling off.
These two headlines from the website of the Australian Broadcasting Corporation give you an idea of how hot it had been:
- Auction frenzy as Sydney keeps leading Australian property prices higher (April 14, 2015)
- House prices: When will we get to the point that we just say NO? (March 1, 2017)
With that perspective, here's what the July 2018 Elliott Wave Financial Forecast had to say:
In Australia, the decline from an August 2017 peak in Sydney home prices accelerated into a decline of 4.2% year-over-year in May. It was the fifth-straight decline, the longest stretch since September 2008. While Aussie home price declines "are most pronounced in Sydney," they are now spreading... These are just the first wisps of a deflation that will eventually consume the global economy.
Indeed, The Guardian, a newspaper based in Britain, reported (Jan. 1, 2019):
Australian house prices falling at fastest rate in a decade
House prices have fallen the most in a single quarter since 2008, according to new data for December.
Compared with their 2017 peak, Sydney and Melbourne's house prices have now dropped 11.1% and 7.2% respectively, and a sharp fall in the December quarter hints that the decline is picking up pace, according to data researcher CoreLogic.
Prices dropped 4.8% in 2018 nationwide, prompting Deutsche Bank to identify a potential Australian housing crash as one of the top 30 risks to the global economy.
Sydney's house prices surged nearly 20% in 12 months between 2016 and 2017, and national capitals rose 12.9% as well.
But 2018 brought a long slide, with Sydney prices falling 8.9% across the year, and Melbourne falling 7%.
Western Australia's houses fell 7.2%, with a 4.7% drop in Perth.
And the pace picked up towards the end of the year. In the three months to December, Sydney prices dropped 3.9% -- with 1.8% in just one month -- and Melbourne fell 3.2%.
Sydney prices are now back to the level of August 2016, and Melbourne is back to the prices of February 2017. Perth has not seen houses this cheap since 2009, and Darwin since 2007.
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