Brighter Buying

Market update: Are we seeing a new cycle or a dead cat bounce?

by Tiana Toledo, Sales Associate 3 May 2023

We’ve seen a few property commentators speculate that recent price rises are a ‘dead cat bounce’. Sounds pretty awful – but what does it mean?

In investment speak, this phrase refers to a temporary recovery in prices after a substantial fall.

So is that what’s happening in the Brisbane market? Or is last month’s uptick the beginning of a new growth cycle?

In truth, it’s probably still too early to tell. Earlier this year, most commentators agreed that price falls would stabilise when interest rate rises did.

Certainly the RBA is facing mounting pressure to take its finger off the rate rise trigger.

In its Business Outlook report released this month, the brains trust at Deloitte slammed the Reserve Bank of Australia’s decision to keep hiking rates when Australia was facing “the weakest rate of economic growth outside of the pandemic since the recession of the early 1990s”, reports Australian Property Investor.

So does that mean mortgage holders can breathe easy? Economists at the big banks seem to think this week’s rate rise should be the last, reported Rate City.

So whether we’re seeing a dead cat bounce or not, the end of the downward cycle seems close but the market may pause for breath before we see strong signs of a price rise revival.

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