Home prices could still fall, expert warns

Font size :
A leading global economist has warned that house prices could still decline, despite consistently rising over the years.

“I don’t get the impression that we have a housing bubble here yet... but I would say that Australia must beware of the narrative that because prices have never fallen they can never fall again,” Paul Sheard, chief economist at the ratings agency Standard & Poor’s, said at the annual AB+F Breakfast with the Economists in Sydney.

“It can happen and when it does, it is difficult to reverse.”

However, the Australian-based economists on the panel countered the view, pointing out that low interest rates, low unemployment, and sufficient population growth can support the property market.

“History tells us that unemployment has to rise substantially or rates increase substantially (to cause a housing crash)”, said Su-Lin Ong, managing director and chief Australian economist at RBC Capital Markets. “Neither of those events were likely to happen.”

The panel also said that the economy is performing well in general, but noted that consumer and business concern about the possibility of recession was high.

“It’s very unlikely that we’ll have a recession,” said Shane Oliver, chief economist at AMP.

He also pointed out how previous predictions that Australia would suffer an “inevitable recession” after the mining boom were proven wrong. He said the Australian economy had been surprisingly resilient and flexible.

Different regions are experiencing various rates of growth but this should not be taken as a negative thing, according to Westpac’s chief economist, Bill Evans. He said that state infrastructure spending is offsetting the flickering natural gas development boom.

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Mortgage News and Articles

CBA unveils new repayment simulator CBA unveils new repayment simulator

The simulator will show customers the differences between different types of repayments Read more

How to tell when a housing market is cooling How to tell when a housing market is cooling You need to check clearance rates, listings, and the price gap, among other factors ... Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

More mortgage news and articles

Sponsored Links

Tuesday, Sep 26, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords