Sydney house prices continue to soften. (Web Photo)
Security capital (AMP Capital) warned that house prices in Sydney and Melbourne could fall another 5 percent this year and fall further next year as banks continue to tighten lending, the Australian newspaper reported.
Oliver (Shane Oliver), chief economist at Security Capital, said that while observers had "good reason to worry", there were high loan interest rates and high supply absences, as well as a further expansion of the construction boom. It is unlikely that the housing market will collapse.
Although prices in Sydney and Melbourne may not be doing well, prices in other major cities will improve. House prices in Perth and Darwin are at or near the bottom, or are about to rebound, while prices in Adelaide, Canberra and Brisbane will all increase, and Hobart`s house price increases are expected to continue. Central housing prices in remote areas will grow relatively strongly.
At the same time, the once-hot east coast capital city housing market has been caused by loan restrictions and "skyrocketing" caused buyers fatigue is gradually cooling down. Housing prices in capital cities have fallen in May in a row, and the auction liquidation rate has been falling, according to CoreLogic, a property research firm.
Mr Oliver says market watchers do have reason to worry. He added that housing prices in Australia`s real capital cities are already 27 percent higher than the long-term trend, house prices / income ratios are also high among (OECD) members, and the lending environment has deteriorated, with a surge in apartment supply.
But Mr Oliver points out that a housing crash, such as an average 20 per cent fall in home prices across Australia, is unlikely to happen because the real engine of housing prices is population growth, and the current supply of housing is far from keeping pace with population growth; Second, while mortgage pressure remains a risk item, the ratio of interest-only loans should have fallen sharply. He also said that repayment spending as a share of household income is also declining, with most households having the ability to repay loans and non-performing loans at a relatively low level.
The security capital survey said the slowdown in the housing market cycle would affect the economy as a whole, such as consumer spending. In addition, Oliver cautioned that while residential properties have long been investors` long-term investments, there is still a need to be cautious in a market where residential properties are expensive and rental benefits are falling.
