![]() ![]() Rising inflation will also cut affordability and limit buying power, reducing or limiting property demand, Powell says. Inflation: If inflation sticks around for longer, further rate rises, or high rates for longer, could push more mortgage holders into financial stress and listings higher, particularly from investors who are quicker to offload properties than an owner-occupier.More unemployment will mean greater uncertainty, fewer loan approvals, delayed demand, and greater inequality in Australia. Rising unemployment: RBA expects unemployment to rise as inflation slows down.This combination will slow demand and exert downward pressures on prices unless incomes rise or mortgage rates fall. Wage growth has lagged behind home prices for some time, and higher interest rates have hit borrowing capacity. Affordability: Stretched affordability could weaken prices, Powell says.What that could push Australian property prices down in 2024: This, together with the prospect of a cash rate cut in the latter half of 2024, would most likely signal a further gear change in property price, Powell says. If this buffer is reduced, it will speed up access to the property market for many by lifting borrowing capacity, increasing demand and resulting in swift upward price pressures on the housing market. Mortgage stress is a big issue in Australia right now, for a few reasons: Home loan interest rates are rising fast off the back of Reserve Bank cash rate decisions. Relaxed lending: Given high inflation and interest rates, there are calls to review the mortgage serviceability buffer (currently 3 per cent).Supply: Given Australia’s slowing housing supply in the face of a bigger Australia, the extremes of a supply shortfall will exert upward pressures on the housing market.It will continue to exert extraordinary upward price pressures on the property market, Powell says. ![]() Population: Unprecedented post-COVID migration and population growth will continue to send shock waves through the property market as a booming population looks for a place to live.What could drive Australian property prices up in 2024:
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