At a time when almost every week major banks are adjusting their calls on the faltering market, price falls have continue to broaden.
Earlier this week, HSBC downgraded its assessment, predicting prices could fall up to 8 per cent next year.
Morgan Stanley revised its initial house price outlook of a 10 per cent fall from peak to trough nationally, to 15 per cent.
SQM Research predicted a 12 to 17 per cent decline by the end of next year, highlighting that the repeal of negative gearing could cause a fall as much as 30 per cent by 2020.
ANZ senior economist Daniel Gradwell said in the bank’s latest research note that housing prices in Sydney and Melbourne were expected to fall around 15 to 20 per cent from peak to trough, with potential spillover to Canberra, Brisbane, and Adelaide.
“While the pace of decline in Sydney and Melbourne housing prices has been in line with expectations to date, we see no evidence that it is easing.”
Unlike previous downturns in the housing market, ANZ doesn’t see the RBA cutting official interest rates in order to support prices.
“We don’t think this cycle will see lower interest rates trigger a rebound in housing prices,” ANZ economists wrote.
ANZ said it was unable to pinpoint how long banks would continue to clamp down on lending, but expecting housing prices to broadly stabilize by early 2020, allowing the RBA to begin to slowly lift official interest rates.
Economists are now warning Australians to prepare for the “longest and deepest” housing downturn in the country’s recent history.
While the doom and gloom takes hold along the eastern seaboard, Hobart and Canberra continue to defy the odds as the only cities with increases in prices regardless of economic or political conditions.