IMF is predicting Australia's housing market is likely to be hit hard - Property News AU/NZ | propertynoise.co.nz & propertynoise.com.au

PHOTO: The International Monetary Fund (IMF). SUPPLIED

The International Monetary Fund (IMF) has released its latest global economic outlook, and unfortunately for Australia, the report is not positive. The IMF is predicting a global economic downturn, and Australia’s housing market is likely to be hit hard.

According to the report, the global economy is expected to slow down significantly in the next year, with growth projected to be just 2.9% in 2023. This is down from the 3.7% growth rate seen in 2022. The IMF cites rising inflation, supply chain disruptions, and the ongoing COVID-19 pandemic as the main drivers of this slowdown.

For Australia, the IMF is predicting a particularly tough time for the housing market. The report suggests that the country’s housing prices are likely to decline in the coming months, due in part to a recent surge in interest rates. The IMF also notes that Australia’s high levels of household debt and low wage growth could exacerbate the housing market downturn.

The news is certainly concerning for Australians who are already grappling with a housing affordability crisis. In recent years, many young Australians have been priced out of the housing market entirely, with skyrocketing prices making it nearly impossible for first-time buyers to get a foot on the property ladder. The IMF’s prediction of a housing market downturn could make this situation even worse.

However, it’s not all bad news. The IMF report also notes that the Australian government has been taking steps to address some of the underlying issues in the housing market. For example, the government has introduced a number of measures to increase the supply of affordable housing, including tax incentives for property developers. The report suggests that these efforts could help to mitigate some of the worst effects of the housing market downturn.

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Overall, the IMF’s global economic outlook is a sobering reminder of the challenges that lie ahead for the world economy. While there are some bright spots, such as the continued strength of the tech sector, the report is a warning that we need to take action to address the underlying issues that are driving the economic slowdown. For Australia, this means addressing the issues in the housing market and taking steps to support economic growth in other sectors.