Residential building approvals have fallen 5 per cent in April, much worse than the 3 per cent fall tipped by economists.
This prompted UBS to downgrade its house price outlook to fall 5 per cent plus over the next 12 months.
According to a report in Fairfax media, this is below UBS’ long-hold view of flat to minus 3 per cent year on year.
UBS continues to expect the Reserve Bank of Australia will hold interest rates at the current cash rate of 1.5 per cent until at least the second half of 2019, “but but given the downside risks to our housing and consumer outlook, the RBA could remain on hold for even longer.”
Yesterday consumer confidence fell for the first time in seven weeks, with ANZ’s head of Australian economics, David Plank, saying the fall was “a little worrying” and was likely driven by mortgage holders’ concerns about existing debt combined with falling house prices in the largest capitals.