Economists predict house prices could fall 10-15 per cent from their peak, with a trough not expected until the second half of 2027, according to a Morgan Stanley note. Prices have already dropped 5.2 per cent since March, and Morgan Stanley says the slide could be only one-third complete, with the Reserve Bank's four rate rises in 2026 above expectations. The bank says the downturn would be Australia's largest nominal housing decline in over 40 years, and it does not expect the five indicators of a bottom to turn before mid-2027. Because construction accounts for about nine per cent of employment, unemployment could rise to 5.1 per cent. Construction costs rose 3.2 per cent in the 12 months to September, while Australia has completed 355,817 dwellings in the first two years of a five-year goal of 1.2 million homes, about 124,000 behind schedule.
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AUD/USD
▼ Likely negativeRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/20/2026 | 0.70040 |
| Change that session | +0.35% |
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