The impact of falling house prices on local economies

Rob Hall - Senior Urban Economist

Rob is driven by a desire to help shape communities for a better future. Trained as an economist, he has a unique fifteen-year background in economics, demographics, statistics and strategic planning with a focus on understanding how economic forces influences local government areas across Australia. At .id, Rob leads the economic team to provide Local Government with high-quality analysis and information tools, including specialised consulting services and tailored information products such as economy.id. By working at the intersection of place and economic analysis, Rob offers insights that help local government develop strategies with confidence and make informed investment decisions.

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2 Responses

  1. Hi Rob

    That’s an excellent article, thanks! I guess the fascinating thing about economics is all the different perspectives and views that can come out of the same phenomenon (i.e. falling housing prices).

    I am in the Kimberley region of WA and despite the fact that the regional market here is quite skewed (think Native Title determinations and employee subsidised housing), the housing market has proven resilient and this ties in with your comments on diversification (despite being located in WA we are not over reliant on mining and have a reasonable agricultural base). However, I fear that decline in both house prices and building approvals (which continue to slide from historically high levels) could impact on the regional labour market going forward, particularly the construction sector.

    Should the cash rate remain at its historic levels of 1.5% or suffer a slight cut, especially in WA, declining housing prices could translate into more accessible housing since Western Australia’s Wage Price Index increased by 0.3% over the quarter and rose by 1.5% in annual average terms to December 2018 (WA treasury), and house prices continue to weaken.

    So, yes, I think there is hope there for many people to enter the market. The other thing is how institutional mechanisms (e.g. royal commission into banking) could affect affordability, so despite not having the data to see how our region was affect.

    Well done on the analysis. It is really beneficial to see how different analysts see the topical issues affecting the nation at different levels!

    Cheers
    Caroline

    • Rob Hall says:

      Hi Caroline. I’m glad you enjoyed the blog!

      Thanks for sharing your insights about the Kimberley region. I’m always interested to hear about how the macro issues are playing out across different regions of Australia.

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