Falling home prices have become somewhat of a norm since they began their descent at the end of 2013. Experts predict more pain to come, but don’t expect cooling measures to be wound back just yet.
The raw numbers look compelling – prices are down around 11.2 per cent from a peak in the third quarter of 2013, but the Government will likely have a bigger picture in mind.
It is focused on keeping the real estate market stable amid rising interest rates and an uncertain economic outlook.
At first glance, that 11.2 per cent price fall may seem substantial, but look at it within the context of a 62.2 per cent spike from the second quarter of 2009 to the third quarter of 2013 and the picture changes considerably. Home values may not have fallen enough to convince policymakers to ease the cooling measures, including the total debt servicing ratio framework and additional buyer’s stamp duty, any time soon.