Housing economist says buying window opens before year-end as Australian prices keep falling
Tim Reardon, chief economist of the Housing Industry Association, warned that a brief buying window for first-home buyers may close shortly after Christmas, while predicting a further price drop of up to 14% and a rebound in the market later next year.
Australian home-buyer activity has slowed amid five interest-rate hikes, high inflation and recent tax reforms, leaving national house prices 6.7% below their March peak, according to Cotality data. The Commonwealth Bank forecasts the decline could reach 14%.
Tim Reardon, chief economist of the Housing Industry Association, told 7NEWS’s podcast The Issue that the market is entering a short-term buying window. > “So there is a narrow window of opportunity here for first home buyers and those looking to get into the market,” he said, adding that the window is likely to close “sometime shortly after Christmas this year.”
Reardon expects the broader market to recover quickly, citing a persistent housing shortage relative to Australia’s population and low unemployment by historical standards. He projected that Perth and Brisbane would see the fastest rebounds, while Sydney could experience a longer downturn due to greater sensitivity to interest rates.
Contrasting with major banks, Reardon said the Reserve Bank of Australia may raise the official cash rate again early next year, despite the current 4.85% level – the highest since the Global Financial Crisis. He linked ongoing inflation to overseas price pressures, wage agreements and recent minimum-wage increases.
Looking ahead to the building sector, Reardon predicted a slowdown in housing construction in 2027, followed by a rebound in 2028, attributing the dip to interest-rate hikes, tighter foreign-investment caps and recent changes to negative-gearing and capital-gains-tax rules. He called for broader fiscal restraint, higher caps for foreign investors, accelerated depreciation for property owners and stamp-duty reforms at state and territory levels.
The Albanese Government, represented by Assistant Minister for Productivity Andrew Leigh, said it is working with states to increase housing approvals. Leigh noted that a record 249,000 homes are currently under construction, describing the effort as “unprecedented” government investment in housing.