Housing rebound doesn’t look sustainable

House prices rebounded in March but we aren’t convinced that this marks the beginning of a sustained rebound. Affordability is set to become the most stretched since the early 90s and if the unemployment rate rises as rapidly as we anticipate, house prices will almost certainly start to fall again. We’re sticking to our forecast that house prices will ultimately fall by 15% from their 2022 peak and that any rebound will be tepid. Accordingly, there is still a risk that Australia’s economy enters a recession.