RBA Warns of Weaker Housing Market Conditions Weighing on GDP Growth

The Reserve Bank of Australia (RBA) has released its updated set of forecasts, warning that weaker housing market conditions will weigh on GDP growth in 2026. The bank's economists expect a decline in property prices to further slow an economy already impacted by interest rate rises and the Middle East war.

According to the RBA, property prices have fallen by 1.6% since their March peak, and are expected to continue declining gradually due to tightening monetary policy, tax changes, and global uncertainty.

The bank's economists revised up its growth forecasts for the 2026/27 and 2027/28 financial years, citing a stronger outlook for data centre investment. However, they also downgraded their productivity growth forecast for 2026 from 0.2% to a decline of 0.5%, citing little evidence of improved productivity growth.