Resolves as the peak-to-trough decline, expressed as a percentage, of the CoreLogic daily home value index (5 capital city aggregate) from its all-time-high of 176.66 on May 7th 2022.
The market will resolve when the index first increases by 5%, or on Jan 1st 2026, whichever comes first.
If the peak-to-trough decline falls outside of the market's numerical range, the market will resolve to the corresponding maximum or minimum of the range.
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Index today is 166.91, which is up 5.001% from the minimum of 158.96 in February.
Peak to trough fall from May 2022 to Feb 2023 was 10.0%. Market resolves to 10.0
Property values have been going up slightly for the last month and a bit, at least according to the index. And after this banking scare in the US, it seems expectations are now that interest rate hikes are over, so that's the main reason for the falls possibly over.
The peak-to-trough fall before the recent increase was 10.0%.
There’s plenty of evidence that Australian property prices will remain largely resilient even through any further rate increases, as the “immigration tap” is flowing strong after the covid lull. Flexibility in immigration policy returning means the government has access to control property prices with external demand.
My assessment: I’d be surprised if we see any more decreases to property values. Rents expected to continue rising. See graph 1.1
https://www.abs.gov.au/statistics/people/population/overseas-migration/latest-release
@Gen Yeah rents are going totally nuts. And I didn't correct you before, but I'm actually a filthy Melburnian - I work mostly remotely for Uni Adelaide. Agree that it's lovely though!
There's talk of APRA loosening lending standards at the end of this month. If they return to the pre-2019 arrangement of a 7% serviceability floor and a 2% buffer, that would increase borrowing capacity by an amount that will cancel out four months worth of interest rate hikes. With likely only two or three more rate hikes to go, seems likely that the bottom for property prices would be in if this happens.
@chrisjbillington Ah, APRA denied this today, when asked directly in the Senate. They said they're happy with the current buffer.
@chrisjbillington The current buffer proved a pretty smart measure in the end. Not surprised they want to keep it for now when further rises are possible