Chanticleer

Falling house prices will weigh on profit season

Rising interest rates and declining home values threaten earnings across a range of sectors. Expect more questions than answers this time.

Updated Aug 1, 2022 – 6.54pm, first published at 4.22pm

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The accelerating slide in Australian house prices – and the factors behind it – will hang heavy over the August earnings season as investors hunt for clues about the state of consumer demand, the impact of rising interest rates on corporate balance sheets and the outlook for inflationary pressures.

CoreLogic’s latest data on Monday showed the biggest monthly decline in national house prices since 1983. The pace of monthly declines rose from 0.8 per cent in June to 1.4 per cent in July, with prices now down 2.6 per cent since they peaked in April. Forecasts now call for a peak-to-trough fall of 15 per cent to 25 per cent.

James Thomson is senior Chanticleer columnist based in Melbourne. He was the Companies editor and editor of BRW Magazine.