Australia is experiencing a slump in household consumption and is a big drag on economic growth and inflation, which is likely to last at least another year despite three interest rate cuts, a senior Central Bank official said on Thursday.

However, rising house prices in recent months, steady population growth and all-time low interest rates are expected to revive housing construction by 2021, Reserve Bank of Australia (RBA) Deputy Governor guy Debelle said in a speech.

In Australia, housing is a significant part of Australia’s $ 1.95 trillion ($1.3 trillion) economy, with housing accounting for about 2% of total employment and 6% of the country’s gross domestic product (GDP).

“Much of the downturn in construction activity is yet to come,” Debelle said in Sydney in a speech titled ” Housing and the economy.”

House prices and construction activity in Australia peaked nearly two years ago with permits for new homes about 40% lower than their late 2017 highs.

“We forecast a further decline in housing investment of 7% over the next year and there is some risk that the decline could be even greater,” Debelle added.

“This will directly deduct about 1 percentage point of GDP growth from peak to trough …”

In addition, consumption is affected by housing construction. The RBA’s standard estimate of the wealth effect is that a 10% fall in house prices leads to a 1.5% fall in household consumption over time.

Debelle also noted that the recent downturn had a “larger than expected” side effect on inflation, as rents and new home purchases together account for about one-sixth of the CPI basket.

In addition, the decline in housing turnover was reflected in “transfer costs” such as stamp duties and fees paid to estate agents and lawyers. Those costs fell by more than 20% in the year to the March quarter, shaving about 0.5 percentage points of GDP.

“We have not fully factored this into our GDP forecasts, and this is part of the explanation for why GDP growth has been slower than we expected,” Debelle said.

Photos: 32 of the world’s hottest real estate markets

A new study by Global Property Guide has analysed the rise in residential property prices in several countries on five continents. Here’s a look at the top 32 markets based on year – on-year (Y-O-Y), inflation-adjusted price figures as of the fourth quarter (No4) of 2014. 

House prices here rose 0.25% compared to 2013, down 2.57%. 

For the 4th quarter of 2014, prices increased by 0.25%.

House prices here are up 1.15% compared to 2013, down 1.21%.

For the 4th quarter of 2014, prices increased by 0.66%.

House prices here rose 1.22% compared to 2013, down 14.36%.

House prices here rose by 1.70% compared to 2013 by 0.30%.

For the 4th quarter of 2014, prices increased by 0.59%.

House prices here rose by 1.70% compared to a 3.13% increase in 2013.

For the 4th quarter of 2014, prices increased by 0.97%. 

House prices here rose by 2.12% compared to a 15.10% increase in 2013.

For the 4th quarter of 2014, prices decreased by 0.77%.

House prices here increased by 2.74% compared to 2013 and amounted to 1.97%.

For the 4th quarter of 2014, prices decreased by 0.69%.

House prices here rose 2.84% compared to a 0.19% increase in 2013.

For the 4th quarter of 2014, prices increased by 1.69%.

House prices here rose by 3.34% compared to a 1.12% increase in 2013.

For the 4th quarter of 2014, prices decreased by 0.48%.

House prices here rose by 3.92% compared to a 3.03% increase in 2013.

For the 4th quarter of 2014, prices decreased by 0.62%.

According to S

However, the Federal housing Finance Agency estimated that U.S. home prices rose 4.91%, compared with a 7.69% increase in 2013. For the 4th quarter of 2014, prices increased by 1.35%.

House prices here rose 4.87% compared to a 5.61% increase in 2013.

For the 4th quarter of 2014, prices decreased by 0.75%.

House prices here rose by 4.95% compared to 2013, an increase of 3.81%.

For the 4th quarter of 2014, prices decreased by 0.28%. 

House prices here rose by 5.09% compared to 2013 by 2.71%.

For the 4th quarter of 2014, prices decreased by 0.24%.

House prices here rose by 5.11% compared to a growth in 2013 of 4.07%.

For the 4th quarter of 2014, prices increased by 1.01%.

House prices here rose by 5.39% compared to a 9.77% increase in 2013.

For the 4th quarter of 2014, prices increased by 7.14%.

House prices here rose by 5.68% compared to 2013 by 1.17%.

For the 4th quarter of 2014, prices decreased by 0.52%.

House prices here rose 6.09% compared to an 8.66% increase in 2013.

For the 4th quarter of 2014, prices increased by 0.81%.

House prices here rose by 6.28% compared to an increase of 11.51% in 2013.

For the 4th quarter of 2014, prices increased by 2.11%.

House prices here rose 6.99% compared to a 10.46% increase in 2013.

For the 4th quarter of 2014, prices increased by 1.94%.

House prices here rose by 7.11% compared to a 14.38% increase in 2013.

For the 4th quarter of 2014, prices increased by 1.23%.

House prices here rose by 7.33% compared to a 13.91% increase in 2013.

For the 4th quarter of 2014, prices increased by 0.91%.

House prices here rose 8.10% compared to 2013, an increase of 3.91%.

For the 4th quarter of 2014, prices increased by 1.95%.

House prices here rose by 8.34% compared to 2013 by 7.07%.

For the 4th quarter of 2014, prices increased by 0.10%.

House prices here rose by 8.45% compared to 2013 by 7.38%.

For the 4th quarter of 2014, prices increased by 2.01%.

House prices here rose 8.57% compared to 2013, an increase of 3.90%.

For the 4th quarter of 2014, prices increased by 1.16%.

House prices here rose by 10.92% compared to 2013 by 5.58%.

For the 4th quarter of 2014, prices increased by 5.75%.

House prices here rose by 12.09% compared to an increase of 18.24% in 2013.

For the 4th quarter of 2014, prices increased by 2.47%.

House prices here rose by 13.26% compared to 2013 by 7.69%.

For the 4th quarter of 2014, prices increased by 4.24%.

Housing prices here have grown by 16.29% in comparison with 2013 year by 6.38%.

For the 4th quarter of 2014, prices increased by 3.83%.

House prices here rose 16.48% compared to a 23.79% increase in 2013.

For the 4th quarter of 2014, prices decreased by 0.88%.

House prices here increased by 16.89% compared to 2013 and amounted to 13.61%.

For the 4th quarter of 2014, prices increased by 3.83%.

Source: Global property guide

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