By Shane Oliver, Head of Investment Strategy & Chief Economist from Oliver’s Insights, AMP Capital, Edition 9 2016
- Very expensive housing and high household debt leave Australian housing vulnerable. However, in the absence of either a recession or much higher interest rates a property crash looks unlikely.
- The Sydney and Melbourne property markets are likely to slow further this year and have another cyclical 5-10% price downswing around 2017-18.
- The combination of high house prices, the strong gains of the last few years in Sydney and Melbourne, low rental yields and possible changes to tax concessions around property mean investors need to be careful.