Market ‘uncertainty’ causing Australian home price growth to slow

REA Group economist Paul Ryan says home price growth slowing to a 12-month low is in part due to “faster-than-expected” interest rate expectations later in the year.

Ryan said there is a lot of “uncertainty” about how quickly interest rates will rise later in the year.

“On the one hand you have the market which I think is pricing the cash rate at the end of the year at 2.5% and then you have the main bank analysts who are saying something around 1 or 1.25% in at the end of the year,” Ryan told Sky News Australia.

“This makes a big difference to mortgage holders and potential homebuyers, so I think the uncertainty is already something that weighs heavily on the market and I think that’s part of why we’re seeing price growth slow so much.”

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