AllianceBernstein’s forecast also puts the Australian economy in a “downbeat” position.
Senior economist Guy Bruten said in a note to investors that “… with signs of oversupply starting to emerge in pockets of the market, and with APRA … starting to offer ‘guidance’—a weak form of macro prudential policy—one wonders how long this can continue.”
“There’s a clear risk that falling house prices may be the next phase in the post-commodity-boom adjustment story,” he added, seemingly reiterating claims by the Australian Bureau of Statistics.
The ABS revealed in its latest report that the number of new home loan commitments was down to 0.7% in November. The number of loans also plummeted to 0.8%, excluding the number of refinanced dwellings.
Bruten warned that it would be “unwise to be swayed” by the recent “better-than-expected” labour figures, arguing that the country’s economy is still fundamentally bearish.
“Despite a couple of better jobs readings, we remain downbeat about Australia’s prospects for the next few years. The long shadow of the commodity price bust remains the key theme. The next phase? Weaker LNG prices and, perhaps, the long-anticipated housing correction,” he said.
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