Soft landing for house prices

According to Saul Eslake, Chief Economist of the ANZ Bank, house prices will not fall in Australia by as much as they have in other English speaking countries. This is because underlying demand in Australia is still greater than the supply of new homes, due to high levels of immigration in recent years.

House prices have fallen by 15% and 20% in the UK and the USA respectively. In Australia average prices have fallen by about 3% in the last six months. 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.