Australian home prices, as a weighted average, have been falling for several months, largely reflecting weakness in Sydney and Melbourne, the nation’s largest and most expensive markets.
From the recent cyclical peak, national prices have fallen by 1%.
As seen in the chart below from the Commonwealth Bank, the current price downturn is shorter and smaller than those seen in the past.
While this doesn’t necessarily mean that prices will continue to fall — it is, after all, just an indication on what’s been seen in the past — there’s no shortage of analysts out there who think the current downturn has further to run.
The Commonwealth Bank, Australia’s largest home loan lender, thinks prices will fall for another 18 months, driven down by ongoing weakness in Sydney and Melbourne, markets that outperformed the national average in the previous price upswing.
Morgan Stanley, pointing to its lead housing market indicator, also predicts that prices are likely to keep falling, albeit in an “orderly” manner.
CoreLogic, one of Australia’s leading authorities on Australia’s housing market, will release its May Home Value Index early next month.
The current indications suggest that another small decline will be reported.
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