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House Prices ReboundAustralian median house prices are continuing to rebound despite ten consecutive interest rate hikes reducing borrowing capacity.

According to CoreLogic figures, the combined capital city median house price is up 0.6% in the past month.

AMP Capital chief economist, Dr Shane Oliver, says borrowing capacity has fallen by about 27% as a result of interest rate rises, which he says is the biggest decline in borrowing capacity on record.

He says household debt servicing payments as a share of income are at their highest ratio in more than a decade.

He believes the continual increasing of rates may result in further supply issues as some financially stressed homeowners sell.

Oliver says the current lift in house prices will be “short-lived” and he does not believe there will be a sustained recovery until next year.

He adds that the market is hard to read at the moment and it is possible prices have already bottomed, particularly if rates have peaked.


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