Australia housing slowdown impacts broader economy

A significant slowdown in Australia’s housing turnover is causing substantial collateral damage to the broader economy. While home prices have remained relatively stable, dropping less than 4% from their March peak, the volume of homes being sold has decreased sharply.

A 15% drop in housing turnover since June compared to the previous year is estimated to be stripping between A$355 million and A$710 million per month from the property-adjacent economy. This downturn affects a wide ecosystem of businesses, including furniture retailers, landscapers, removalists, painters, and conveyancing firms.

Reuters analysis suggests that this reduction in turnover translates to an annual loss of between A$2.8 billion and A$5.6 billion in spending for businesses that depend on residential moves. The slump is attributed to higher interest rates and the government’s rollback of certain property tax concessions, which have collectively sapped market demand.