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Housing supply reforms in store for 2020: Credit Suisse

Australia can expect further housing supply reforms from the federal government in 2020 as real estate remains high on the political agenda, according to Credit Suisse.

In its Investment Outlook report for 2020, the investment bank and financial services company said: “Although house prices have already corrected to some extent, housing affordability is still low.”

“Real estate thus remains high on the political agenda, and further housing supply reforms are very likely.”

The report also said the Reserve Bank of Australia (RBA) lowered its interest rates several times in 2019 to support the economy, and it could continue to do so in 2020.

“At the same time, financial supervision will remain in focus, given the stability risks related to real estate,” the report said.

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Andrew McAuley, chief investment officer at Credit Suisse Private Bank Australia, said in his investment outlook for 2020 that the outlook remains optimistic for Australia in 2020, adding that infrastructure investment would support growth.   

“We note the recent policy announcement by Treasurer (Josh) Frydenberg to provide tax breaks for foreign capital starting large infrastructure projects,” Mr McAuley said.

“More monetary easing is to come from the RBA, but what form it takes is uncertain at this stage.”

Credit Suisse’s investment outlook report also said that while consumption remained low in 2019 due to low growth in household income, weaker housing market conditions and elevated household debt, an increase in public spending supported economic growth.

The firm predicts that infrastructure investment would continue to provide support in 2020.

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“After a relatively subdued 2019, we expect Australia’s economy to pick up with an estimated growth rate of 2.8 per cent,” the report said.

[Related: Stability risks quelled by housing recovery]

Housing supply reforms in store for 2020: Credit Suisse
Housing supply reforms in store for 2020
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Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.

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