House prices stagnate
The ABS Eight Capital Cities House Price Indexes 6416.0 released today shows the property market is totally stagnant with prices unmoved, says Prosper Australia.
“Property spruikers calling ‘Bottom!’ based on this data – and they will be – are misleading homebuyers. Sadly, they have come to believe their own one-sided narrative,” David Collyer Campaign Manager for Prosper Australia said today.
The 0.5 per cent nominal increase turns into a -0.01 per cent decrease after adjusting for inflation. This is despite cumulative interest rate cuts of 1.25 per cent over the last year which ought to have made property significantly more attractive.
“The opportunity costs of holding property at the moment are very high, compared to the riskless Commonwealth bond rate.”
Meanwhile, sales volumes continue to fall, the stock of unsold properties continues to rise, building approvals are very weak and housing finance is bumping along at 35 year lows.
For Australia’s 1.1 million negative gearers, this is yet another three months lost subsidising renters, while holding costs continue to drain their cash flow.
“We repeat our warning to potential homebuyers to stay out of this market ahead of expected price falls.”
Don’t Buy Now!
Media contact: David Collyer 0413 248 193
About Prosper: Prosper Australia is a tax reform lobby group and think tank that is now 120 years old. It seeks to move the base of government revenues from taxing individuals and enterprise to capturing the economic rents of the natural endowment, notably through Land Value Tax and Mining Tax.