Skip to content
Markets
Economics

Shaky Housing Adds $7 Trillion Hazard to Australia’s Economy

  • Economists diverge on how property downturn will hit consumers
  • Most are in RBA camp of cautious optimism; some more worried
Video player cover image
Housing Markets Are Bubbling All Over the World
Updated on

Economists agree Australia’s housing prices are about to sink. What they’re not so aligned on is just how much a slide in the country’s A$10 trillion ($6.9 trillion) property market will drag the economy down with it.

With interest rates rising and inflation yet to peak, few expect an economy that’s 60% fueled by consumption to escape unscathed from a housing correction. While some economists are talking of recession, others expect Australia’s consumers to withstand the reversal of a wealth effect that accelerated during the pandemic.