Experts predict falling house prices will force retailers to dump their prices as sales plunge 

Why you should wait six months to buy TVs, fridges and washing machines: Expert predicts falling house values in Australia will force retailers to lower their prices

  • Experts predict the drop in housing prices could lead to a fall in retail spending 
  • A senior economist said the cost of household goods will plummet
  • National house prices fell by one per cent in the past year, Domain figures show

Experts are warning Australia’s plunging housing prices could lead to a drop in retail spending, which might force stores to slash the cost of household goods like TVs, fridges and washing machines.

From January until June, national house prices slumped by one per cent, Domain figures have revealed.

Sydney’s housing prices dropped an average of 4.5 per cent during the same time period. 

AMP Senior Economist Shane Oliver told Daily Mail Australia on Sunday the slump in prices and approvals will lead to a decrease in retail spending.

Experts are warning Australia’s plunging housing prices could lead to a drop in retail spending 

AMP Senior Economist Shane Oliver told Daily Mail Australia a tougher retailing environment may lead to low retail price inflation as demand for household goods drops (stock image)

AMP Senior Economist Shane Oliver told Daily Mail Australia a tougher retailing environment may lead to low retail price inflation as demand for household goods drops (stock image)

‘As time goes by, and as the housing cycle continues to fall and as completions fall as well, I expect household goods to go negative as it has in Canada,’ he said, referring to a similar decline seen in retail spending overseas.

He said a tougher retailing environment may lead to low retail price inflation as demand for household goods drops. 

Commonwealth Securities Senior Economist Ryan Felsman told Daily Mail Australia the situation in Canada is different that occurring in Australia.

Interest rates have been lifted by the Bank of Canada at least four times in one year. 

From January until June, national house prices slumped by one per cent 

From January until June, national house prices slumped by one per cent 

Mr Felsman said the robust labor market and the rise in equities from the share market will encourage people to spend more.

‘Lots of jobs have been created in the last 18 months and retail spending has gone up as a consequence,’ he said.  

He said as the prices of goods go down, people would be encouraged to spend more.

‘People spend more when everything is cheaper,’ he said.       

Commonwealth Securities Senior Economist Ryan Felsman told Daily Mail Australia the robust labor market and the rise in equities from the share market would encourage people to spend more (stock image)

Commonwealth Securities Senior Economist Ryan Felsman told Daily Mail Australia the robust labor market and the rise in equities from the share market would encourage people to spend more (stock image)

 

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