7.5% fall in Australia house prices13 October 2015 by News Desk
House prices in Australia could fall by 7.5% during the course of 2016, according to latest forecasts.
A combination of over-supply of residential property and slowing population growth means the housing market in Australia is set for a ‘re-adjustment’ over the next 12 months.
A record number of new homes, around 225,000, will be built this year but slowing demand will create a major over-supply of properties which, added to an increase in interest rates, will lead to a significant cooling of the housing market.
‘Real’ demand for residential property will fall to around 170,000 new homes next year, meaning there’ll be an over-supply of around 50,000 properties in 2016. This over-supply, along with Australia’s slowing population growth, will lead to the fall in property prices.
That’s according to a new report by Macquarie Research that forecasts a 7.5% decline in house prices during 2016 and into 2017 with a recovery starting in the second half of 2017.
The slowdown in Australia’s housing market was highlighted again last weekend in Melbourne, where five apartments were sold for under $275,000 – the cheapest at $200,500.