HSBC has revised its projections for Australian home prices in 2026 and 2027 downward, factoring in the outlook for higher interest rates, tax changes, an economic slowdown, and rising unemployment. The bank's chief economist, Paul Bloxham, noted that due to these anticipated concerns, the banking sector has been increasing provisions for bad debts. HSBC now forecasts that home prices will remain flat year-over-year in 2026, followed by a continued decline in 2027, with an expected drop ranging between 2% and 6% for that year. Bloxham added that a pullback in strong investor demand in smaller cities, including Perth and Brisbane, is also expected to cool these markets.