Australia’s housing market will likely pick up soon

Significance

House prices grew slightly in Sydney and Melbourne in June, ending 19 months of decline, and a national rebound is likely in the third quarter.

Impacts

• The downturn will be less severe than feared, but a full rebound is several years away.
• Declining asset values will push up debt and trigger loan defaults.
• Weak investment will depress household incomes and keep many consumers on the sidelines.