Soft landing for house prices

House prices will not fall in Australia by as much as they have in other English speaking countries says Saul Eslake, chief economist of the ANZ Bank. Underlying demand in Australia is still greater than the supply of new homes, because of high levels of immigration in recent years says Eslake. House prices in the UK have fallen by 15 per cent and in the USA by twenty per cent. In Australia average prices have fallen by about three per cent in the last six months. Areas where there are many loans from non-bank lenders may be the exception because non-bank lenders are generally quicker to repossess and sell up. Prices in the most expensive suburbs are also expected to come down along with the fortunes of “high flying” executives. Areas with high levels of negatively geared investors may also suffer price falls as investors bail out of loss making properties.

Source: Sydney Morning Herald