A housing crash may not be imminent, but a don't expect a return to price growth anytime soon.
That's the message of RP Data analyst Cameron Kusher. Kusher has told the Australian Banking and Finance Mortgage Innovation Forum in Sydney that underlying demand should keep the market from falling to perilous lows, but that value growth is some way off.
"We don't believe house prices will be going up this year. Sales volumes at the moment are 25% below their 10-year average and at their lowest levels since 1996. Stock on the market is up near record high levels," he said.
But these are indicators of short-term demand, Kusher said. Kusher argued that underlying demand remained strong.
"We're still not building enough stock. It's just at the moment people don't have the confidence to go out there and buy nbew homes. Underlying demand remains, and there's still that discrepancy between the amount we're building and the amount we need," he said.
This underlying demand, though, is not set to filter through to actual sales volumes until consumer confidence recovers.
"Until that mindset changes and people aren't saving like they are, until people show a greater propensity to go and spend even in retail, the likelihood of any recovery and any real return to growth is still some way away," he said.
Related stories:
Big end of town gets small end of sales
Housing weakness prompts rate cut calls