Interpac Business and Migration Solutions Melbourne Australia

(October 15, 2010)

EXPECTATIONS for rising house prices in 2011 softened in October, adding to other evidence of cooling in the sector.

The findings of a survey by Westpac and the Melbourne Institute are consistent with recent data showing a slowdown in a broad range of housing indicators, with house prices falling over the last quarter.

The Westpac-Melbourne Institute Consumer House Price Expectations Index declined to 51.1 in October, from 58.8 in July. The index is now well below its peak of 80.3 in January.

In October, 63 per cent of consumers expect price increases over the next year, down from 70 per cent in July, the survey found. On average, consumers expect a rise over the next year of 2.6 per cent, down from 3.6 per cent in July and 5.7 per cent in April.

House-price growth over the last year ranged between 10 per cent and 12 per cent nationally, according to varying measures of the market, Westpac said. Only the major markets of Sydney and Melbourne achieved double-digit growth.

Matthew Hassan, senior economist at Westpac, said consumers have continued to pare back their expectations for house prices despite interest rates staying on hold since May.

The general consumer outlook still points to a soft landing for the housing sector in general.

“The fact that most still expect prices to rise also suggests that those looking to sell properties will be more inclined to postpone selling until a later date than accept materially lower price offers now,” he added.

(Source:theAustralian)