Home prices in Sydney and Melbourne – among the world’s most glorious housing bubbles –– are tanking, after inflation in Q2 hit 6.1% and is expected to go higher in Q3, and after the Reserve Bank of Australia hiked rates by 175 basis points since May, including 50 basis points in August, to a still minuscule 1.85%. And look what housing is doing: It not only failed as the much-hyped hedge against inflation, but it’s tanking.
In Sydney, home prices plunged by 2.3% in August from July and by 5.9% over the past three months, according to CoreLogic. Since the peak in January, the Home Value Index has dropped 7.4%.
“This cycle may be different – both in terms of being deeper and taking longer to recover – thanks to a combination of high household debt levels, high home price to income levels, and an end in the long-term downtrend in interest rates,” he said.Australia Housing Bust Spreads, Accelerates. Prices in Sydney & Melbourne Fall Below Year-Ago Levels, Sales Plunge | Wolf Street