Australia is expected to become the world's worst performing housing market in 2019, with a double-digit price drop over the period, according to a new report from Citi Investment Company.
Of the 60 economies covered by the Citi Report, eleven are at significant risk of a significant decline in home prices during the year, and only Australia could experience declines of more than 10% over one year .
According to Citi, there is a 50% chance that the double-digit decline will occur in Australia. The discouraging outlook for the report was due to the weakening of the Sydney and Melbourne real estate markets. The capital city of New South Wales experienced a 10% decline in the median value of its homes in 2018. The equivalent housing prices in Melbourne fell 9.1% during the same period. year, according to CoreLogic.
This downward trend is expected to continue this year as a result of the Australian Regulatory Authority's restriction on housing loans and interest-only loans.
The rating agency Moody's Analytics had similar forecasts, indicating that the median values ​​of Sydney homes could potentially fall by 3.3% in 2019, while prices in Melbourne are expected to fall by 6%.
Since their peak almost two years ago, the median value of real estate in Sydney has decreased by 11.1%, exceeding the 9.6% decline between 1989 and 1991, which was ended in a recession. The capital is also home to eight of Australia's ten lowest performing metropolitan housing markets.
The Citi study also revealed that these declines in real estate prices, mainly in Sydney and Melbourne, would likely reduce by half a percentage point of the country's gross domestic product this year.
Other economies expected to experience lower house prices in 2019 are Canada, New Zealand, South Korea, Sweden, Switzerland, Thailand and the United Kingdom.
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