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House prices unlikely to face big fall
Email Print Normal font Large font November 11, 2005 - 4:01PM
Australian property investors need not fret about dramatic falls in house prices as the market remains stable, industry experts say.
New figures this week showing house prices on the eastern seaboard declined in the September quarter would appear to support recent warnings from the head of Aussie Home Loans about further price falls.
House prices eased in four of the seven capital cities measured by Australian Property Monitors (APM) during the quarter.
Canberra recorded the largest fall, with prices declining by two per cent to a median price of $401,000, followed by Sydney, where prices decreased by 1.5 per cent to $520,000.
Median house prices dropped by one per cent to $339,000 in Melbourne and fell by 0.9 per cent to $319,000 in Brisbane, according to APM's composition-adjusted median house prices series.
But Darwin house prices surged by 7.9 per cent to $338,000 in the September quarter and Perth prices rose 2.4 per cent, also to $338,000, while prices in Adelaide were flat at $302,000.
Aussie Home Loans managing director John Symond recently said Australians should sell their property investments on the eastern seaboard, particularly in Sydney.
"Generally speaking, for the average mums and dads out there, I think the price of real estate today will decline, and continue to decline, over the next couple of years," he said.
But Housing Industry Association senior economist Harley Dale said prices were unlikely to fall sharply.
"What's probably being forgotten at the moment is that house prices coming back a bit when they've grown on average at 70 per cent for four years is not the same as house prices crashing," he said.
"In parts of the country house prices have been stable and now we're seeing that in parts of the country they're coming off a bit, but I don't really think it's cause for alarm.
"I can't see what's going to trigger them all of a sudden to fall over and keep falling to a large extent."
At some point in time, prices would grow again, Mr Dale said.
"It's just that for the next three to five years, you'll probably get a flat to moderately down outlook for house prices - you're not going to see any capital appreciation," he said.
CommSec chief equities economist Craig James said the housing finance market was healthy, underpinned by a strong job market and stable interest rates.
"There is certainly nothing to support recent claims that house prices are poised to fall," he said.
"The housing market is generally healthy, the main concern being that the rental market may tighten markedly over the coming year due to a downturn of new construction."
And Ray White deputy chairman Sam White said he was confident about conditions in the property market.
"Many people may disagree with me, but I believe the current housing market's core feature is stability," Mr White said.
"Our sales data show firmness in both transaction numbers and dollar volume, so there is nothing to indicate that we will be seeing price decreases in 2006."
Ray White's overall stock levels increased by 26 per cent across Australia and New Zealand in September/October compared to the same period last year, and its Australian network experienced a 25 per cent increase in sales turnover during the two months.
Email Print Normal font Large font November 11, 2005 - 4:01PM
Australian property investors need not fret about dramatic falls in house prices as the market remains stable, industry experts say.
New figures this week showing house prices on the eastern seaboard declined in the September quarter would appear to support recent warnings from the head of Aussie Home Loans about further price falls.
House prices eased in four of the seven capital cities measured by Australian Property Monitors (APM) during the quarter.
Canberra recorded the largest fall, with prices declining by two per cent to a median price of $401,000, followed by Sydney, where prices decreased by 1.5 per cent to $520,000.
Median house prices dropped by one per cent to $339,000 in Melbourne and fell by 0.9 per cent to $319,000 in Brisbane, according to APM's composition-adjusted median house prices series.
But Darwin house prices surged by 7.9 per cent to $338,000 in the September quarter and Perth prices rose 2.4 per cent, also to $338,000, while prices in Adelaide were flat at $302,000.
Aussie Home Loans managing director John Symond recently said Australians should sell their property investments on the eastern seaboard, particularly in Sydney.
"Generally speaking, for the average mums and dads out there, I think the price of real estate today will decline, and continue to decline, over the next couple of years," he said.
But Housing Industry Association senior economist Harley Dale said prices were unlikely to fall sharply.
"What's probably being forgotten at the moment is that house prices coming back a bit when they've grown on average at 70 per cent for four years is not the same as house prices crashing," he said.
"In parts of the country house prices have been stable and now we're seeing that in parts of the country they're coming off a bit, but I don't really think it's cause for alarm.
"I can't see what's going to trigger them all of a sudden to fall over and keep falling to a large extent."
At some point in time, prices would grow again, Mr Dale said.
"It's just that for the next three to five years, you'll probably get a flat to moderately down outlook for house prices - you're not going to see any capital appreciation," he said.
CommSec chief equities economist Craig James said the housing finance market was healthy, underpinned by a strong job market and stable interest rates.
"There is certainly nothing to support recent claims that house prices are poised to fall," he said.
"The housing market is generally healthy, the main concern being that the rental market may tighten markedly over the coming year due to a downturn of new construction."
And Ray White deputy chairman Sam White said he was confident about conditions in the property market.
"Many people may disagree with me, but I believe the current housing market's core feature is stability," Mr White said.
"Our sales data show firmness in both transaction numbers and dollar volume, so there is nothing to indicate that we will be seeing price decreases in 2006."
Ray White's overall stock levels increased by 26 per cent across Australia and New Zealand in September/October compared to the same period last year, and its Australian network experienced a 25 per cent increase in sales turnover during the two months.
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