Lending policies are too tight for investors to get back into the market in large numbers.
Meanwhile developers are left holding the bag on their unprofitable fixed-price projects, so insolvencies across the sector have continued to soar.
Although some people do like to buy new property to be the first user, it's hard to imagine there being much confidence in doing so in the current environment.
With 1.2 million homes targeted to be built over the next five years, it's rational to expect the defects issues to become an even greater problem than we've ever seen previously.
Things are not boding well for housing supply targets, with dwelling starts already mired at decade lows.
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Some big news this week with the release of the inflation figures for the December quarter.
Inflation is expected to be around 0.8 per cent for the December quarter, with over half of the core inflation to be contributed by housing costs (rents, the price of new dwellings, and surging electricity bills).
Higher interest rates have historically been correlated with higher rental yields (and vice-versa), and much of the energy story has been driven by offshore developments, so monetary policy won't have too much direct impact here.
The remaining inflation is likely to come from alcohol and tobacco sin taxes, and food prices, which remain high.
Still, the expected decline to 4.3 per cent over the 2023 calendar year would be a 2-year low, with lower energy costs and a slowing economy set to push inflation below 3 per cent before the end of 2024.
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