The ‘mother of all housing corrections’? Chris Joye on property, rates and where he’d invest $100,000

On a cold Canadian winter's day, the Royal Bank of Canada published a headline that gave homeowners something else to shiver about:

“March marks four years of declining home prices in Canada.” - RBC Economics (April 2026)

That's 48 months of watching your home - probably your biggest asset and a cornerstone of your retirement wealth - become worth less and less.

Nationally, home prices have fallen around 20% from their peak, and the damage is even worse in some pockets. The downturn has even spawned a cult of YouTubers documenting the carnage: homes bought for $1.7 million selling for $1 million; condos once changing hands for $700,000 slashed to $450,000.

A confluence of higher interest rates, stretched affordability, economic uncertainty and savage cuts to immigration targets has coalesced into a housing market implosion that, at an aggregate level, still has no obvious end in sight.

One Toronto-based fund manager recently put it to me rather grimly.

“I bought my family home in 2018. Today, it’s worth about the same. Adjust for inflation and I’ve actually lost money.”

As an Aussie-Canuck, I've watched all this unfold and repeatedly thought:

That couldn't happen in Australia...

... or could it?

Chris Joye sees a ‘perfect storm’ brewing

That's the question I put to Coolabah Capital Investments' Christopher Joye in a wide-ranging interview focussed on the rapidly deteriorating Australian housing market.

And while Joye doesn't think Australia is destined to follow Canada's path, he sees plenty of reasons to worry about what comes next.

“I do think there's a decent probability that this cycle is worse than any that we've seen previously," he says.

Joye believes a “perfect storm” of higher rates, policy changes and potentially weaker migration could push Australian property beyond the 8–10% corrections investors have become accustomed to.

In this discussion, Joye tackles four big questions:

1. Could Australia be heading for the “mother of all housing corrections”?
2. Should property buyers wait - and sellers get out?
3. Why could the AI boom keep inflation and bond yields higher?
4. If you had $100,000 today, where should you put it?

Watch the video below for the full discussion, or read on for the highlights.

Please note this interview was filmed on 2 September 2026.

#1 – Could this be the ‘mother of all housing corrections’?

Joye doesn't think Australia is destined to become Canada. But some of the ingredients are starting to look uncomfortable.

Canada's downturn has coincided with the unwinding of its migration boom. Australia, meanwhile, has a more immediate problem: interest rates.

The RBA's three recent hikes have reversed its 2025 cuts, while Joye estimates changes to negative gearing have effectively delivered another two hikes to housing.

“The Aussie housing market has had to deal with the equivalent of five de facto rate hikes.”

And yet the RBA has “more heavy lifting to do, notwithstanding what could be the mother of all housing corrections,” Joye says. His colleague Kieran Davies has already pencilled in a September hike.

Higher rates and the Budget tax changes are already biting hard. Joye points to Sydney and Melbourne prices falling at annualised rates of around 17% and 15% respectively.

But the Canadian experience points to another risk: what happens if migration also falls?

Facing a public backlash over affordability, the Carney government has savagely cut its annual permanent resident target from a peak of 500,000, while vowing to reduce temporary residents to less than 5% of the population.

Australia has yet to follow suit, with Labor maintaining a permanent migration program of 185,000 places a year. Our post-2022 property recovery was turbocharged by population growth. Take that support away, and it could get far uglier.

“If Australia were to pull the rug from under migration, I think the housing correction could get a lot worse.”

With reports Labor could tighten parts of the migration system, it's a risk worth watching.

#2 – Sell now, buy later?

There are plenty of reasons the housing bulls believe Australia can muddle through.

We're short hundreds of thousands of homes. Unemployment remains relatively low. Vendors aren't being forced to sell. And government support is bringing first-home buyers into the market.

Joye isn't buying the argument - at least for now.

Ultimately, he says prices are set by marginal buyers and sellers. And when rates rise, borrowing capacity falls. Australia's supposed housing shortage doesn't magically restore that lost purchasing power.

“I can't think of too many silver linings... I think the outlook's pretty grim for bricks and mortar right now.”

So I put the question homeowners and would-be buyers actually care about to him.

If you're selling, should you wait for conditions to improve? And if you're buying, should you take advantage of falling prices? Joye needed about six seconds.

“If I was a seller, I'd hit the bid. If I was a buyer, I'd probably exercise the option to wait.”

#3 – AI could keep rates higher for longer

AI is supposed to unleash a productivity miracle, eliminate costs and ultimately push prices lower.

Joye thinks there's a problem with that story: first, we have to build the damn thing.

The AI arms race requires enormous amounts of chips, compute, data centres, energy, materials and skilled labour. That demand is creating bottlenecks and pushing up prices — reversing a relationship investors have taken for granted for decades.

“For the first time in 40 years, technology prices drive inflation rather than detract from inflation.”

Joye accepts the endgame could look very different. AI-driven productivity and billions of robots could eventually unleash powerful disinflationary forces, but that's tomorrow's story.

Today, he believes AI is inflationary, and central banks are still struggling to get inflation back to target. His view is that the world could be heading towards another synchronised hiking cycle.

And that has ramifications well beyond your mortgage.

Higher rates mean higher bond yields - and higher bond yields pose a direct challenge to the expensive equities and property that have dominated investor portfolios.

#4 – Got $100,000? Joye would play defence

So where do you hide if property is falling, equities look expensive and rates could go higher?

I gave Joye $100,000 and asked him to invest it.

No property. No equities. No gold.

“If I had $100,000, I'd probably be putting it into cash and floating rate notes with a very kind of close eye on the level of long-term interest rates.”

It's a remarkable reversal from the post-GFC world.

Australia's 10-year government bond yield has risen from around 1% in 2021 to roughly 5.2%. Cash rates are above their long-run averages. Suddenly, investors are being paid meaningful returns without having to venture far out on the risk curve.

Joye also likes fixed-rate government bonds at current yields and Australian-dollar securities more broadly. But don't mistake his enthusiasm for bonds as an invitation to chase yield.

“High yield is an absolute no-no for us.”

His preference is simple: stay liquid, stay senior in the capital structure and take the attractive yields now available from safer assets.

After years in the wilderness, Joye thinks bonds are back. In fact, he says they're “probably the most attractive they've been in decades”.

Watch the full interview below for Joye's views on how bad Australia's housing correction could get, what could turn it around, why AI could keep rates higher for longer - and where he's finding opportunities in fixed income today.