House prices to keep falling

Sydney house prices have fallen 2 per cent since the beginning of this year and will continue to do so, according to CPM Research. MD John Wakefield predicted that prices could fall as much as 5 to 10 per cent over the full year, depending on the size and frequency of interest rate rises. Wakefield said auction clearance rates have dropped from a peak of 80 per cent last year to around 50 per cent at the end of 2003. This meant the property market has turned from a sellers' to a buyers' market. The Economist's Pam Woodall also said prices are headed for a drop of up to 20 per cent. But HSBC economist John Edwards disagreed that the market is set to fall sharply and said house price growth reflects stronger demand.