House price dives tipped to end sooner than expected

Another investment manager has joined the chorus of economists predicting that Australia’s capital cities will start to recover price-wise sooner than most expected at the beginning of the downturn. 

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After the federal election in May this year, which saw Scott Morrison’s Liberal Party remain in power, economists nationwide began revising their projections about property prices in Australia’s capital cities.

For example, on a live and free Smart Property Investment webcast, which you can access here, BIS Oxford Economics’ managing director, Robert Mellor, predicted with certainty that the Sydney and Melbourne markets will start bottoming out by the September quarter.

Prior to the federal election, general consensus was prices would hit their floor between 2020 and 2021.

Now, investment manager T.Rowe Price suggests that the banking regulator’s moves to loosen the restrictions on access to finance will “put a floor under housing”, compounded by the RBA’s latest rate cut to a new historic low.


“We believe the monetary authorities are trying to put a floor under growth, and to succeed in that, you first have to put a floor under housing,” said head of Australian equities and portfolio manager for T. Rowe Price’s Australia Equity Strategy, Randal Jenneke.

“RBA easing removes the tail risks from the housing market,” he said.

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