Joye predicts steep Australian property falls and warns of recession risk
Economist Chris Joye has warned that Australian house prices could suffer a record downturn, with some Sydney suburbs potentially falling by 20 to 40 per cent. He also sees a genuine risk of recession, which could bring more business failures and unemployment, as households face falling property and superannuation values.
Joye said Sydney prices were dropping at an annualised rate of 18 per cent and forecast a 17 per cent peak-to-trough fall there, while predicting a 13 per cent national decline. A survey of 384 property experts projected a more modest fall of 8 to 11 per cent from the March peak, with recovery not expected until September 2027; values were already down 5.2 per cent. The Reserve Bank’s cash rate reached 4.6 per cent in September after four rises this year, and experts cited interest rates, inflation and uncertainty about tax policy as concerns.
- Joye forecasts a record Australian property downturn.
- Some Sydney suburbs could lose up to 40 per cent.
- Recession and higher unemployment are risks.
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Australian house prices are shaped by borrowing costs, household incomes and how many homes buyers are seeking. Sydney, the country’s largest property market, can move differently from the national market, and prices vary widely between suburbs.
Chris Joye is an economist who comments on housing and financial markets. The Reserve Bank of Australia sets the cash rate, which influences mortgage costs, while property researchers and industry experts also publish forecasts based on their own surveys and analysis.
Housing matters because many Australians own homes or have large mortgages, and property is a major part of household wealth. A broad fall in prices could affect spending and construction, while a recession—when economic activity contracts—can bring business closures and job losses.
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The case for
A sharp fall in house prices could deepen household stress as mortgage costs rise and property and superannuation values weaken, while a recession would risk job losses and business failures. Joye’s warning draws on rapid declines in Sydney and the prospect that higher rates, inflation and policy uncertainty could further squeeze demand; preparing for that risk may help households and policymakers avoid being caught off guard.
The case against
Joye’s forecast is substantially more severe than the survey of property experts, which points to a smaller national decline and an eventual recovery. Forecasts can diverge, and a fall in prices does not by itself establish that recession will follow; the outlook depends on how interest rates, inflation, employment and household finances evolve.
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Originally published by Daily Mail as “Economist warns Aussie house prices could plunge by 40 per cent in some suburbs amid alarming recession prediction”.