Experts agree - no major real estate price bust
16 July 2004
A group of economists and bankers surveyed
by The Age newspaper as part of its annual survey on investment
and economic performance in Australia, have predicted the
outlook for property over the next few years will be a softening
of prices followed by another upturn.
Mr Michael Blythe, Commonwealth Bank Chief
Economist said house price falls across the entire market were
unlikely because major shocks from employment and interest rate
rises were not expected. “There are parts of the housing market
where arguably things have run too far and prices may need to
pull back…just as in every housing cycle”, Mr Blythe said.
AMP Chief Economist, Mr Shane Oliver agreed
that without a major rise in unemployment or interest rates
house prices would only flatten.
Chief Economist at the National Australia
Bank, Mr Alan Oster believes house prices will remain stagnant
for the next two years and will not experience any major falls.
Peter Brain from the National Institute for
Economic Research said house prices are likely to fall by
between 10-12% over the next few years but will be followed by a
recovery.
Macquarie Bank Senior Economist, Mr Richard
Gibbs, said “We expect a period of stagnant prices as there is
little risk of a major crash in the dominant owner occupied
(housing) sector”.
Melanie Hay, an ANZ Senior Economist, said
the most likely scenario for house prices was a period of modest
price increases, punctuated by occasional price falls.
All these opinions are good news for home
owners and investors with prices unlikely to experience serious
downturns, or busts, as some economic and property commentators
had been predicting earlier in the year.
Watch this space for future updates.
