HSBC: Australian housing prices will decline

Paul Bloxham, Chief Economist at HSBC, stated that as these concerns were anticipated, banks have been increasing their provisions for bad debts. The bank currently expects that year-on-year housing prices will remain flat in 2026, while prices will continue to decline in 2027, with an expected drop of between 2% and 6% that year. Bloxham added that the previously strong investor demand in smaller cities, including Perth and Brisbane, has subsided, which is also expected to cool down these markets.