Stephanie Youssef recently discussed with industry experts the current state of the Australian housing market. She further spoke on the rising tensions between BHP and China over iron ore imports. Tim Lawless Tim is currently the Asia-Pacific research director at Cotality. He provided terrific context on how these issues are affecting the housing industry, and the economy more broadly.
The Albanese Government has expanded its Home Guarantee scheme to include all first home buyers, a move aimed at making homeownership more accessible. This policy change comes at a time when Australian house prices continue to rise, demonstrating a resilient market despite external pressures.
In addition to her peer-to-peer conversations, Youssef conferred with Niv Dagan of Peak Asset Management. Dagan noted the increasing home prices are a signal of robust demand, fueled by the low interest rates and constrained housing supply. The Home Guarantee scheme is already being expanded, and this will probably inflate demand further still. First-time buyers, having struggled to realize their dream of home ownership, will particularly welcome this move.
Speculation has circulated China may have unofficially banned purchases of BHP’s iron ore. This is on top of other domestic housing announcements. This new reality makes the economic picture much more complex. China remains one of the largest trade partners for Australia. The short-to-medium term consequences of this ban on BHP’s bottom line, and on the iron ore market more generally, are still unfolding.
Lawless stressed that today’s housing market is very strong. He cautioned that growth in America’s economy may be affected by outside forces, including international trade relations. He noted that longer-term trade disruptions with China would eventually impact the broader Australian economy. This upheaval might outlast even this impact across segments of the housing market.
Longer term Dagan conceded that the outlook for housing appears bright. Beyond those few critical words, he warned that we abandon our International Affairs priorities at our own peril. In the process, he cautioned investors to beware. Geopolitical tensions have the potential to affect commodity prices and economic stability for Australia.
