Today on Ausbiz, I pushed back on forecasts calling for a 20–40 per cent collapse in Australian housing prices. In my view, that outcome is highly unlikely given the way our system is structured.

Yes, prices can fall. But when you’re bringing in tens of thousands of people each month and vacancy rates are sitting around 1 per cent, supply simply isn’t keeping up with demand. That imbalance continues to support prices.

Then there’s policy. For decades, governments of all persuasions have introduced schemes to support home ownership, from low deposit programs to shared equity and access to super. With two thirds of households either owning or paying off a home, there’s no real incentive to engineer a sharp decline in prices.

Importantly, the banks, regulators and the Reserve Bank of Australian (RBA) are all aligned around maintaining stability. With the majority of bank assets tied to residential mortgages, a significant fall in prices would have broader consequences for credit growth and the economy.

That’s why I think a large-scale collapse is improbable. A pullback in parts of the market is possible, but I’d be more inclined to see that as an opportunity rather than a crisis.

Watch the episode via Ausbiz here: Roger’s reasons why the housing market wont crash