Australian property prices ‘likely to see further drops’

Experts have said that those considering property investment in Australia will see prices continue to drop. Gus Medeiros, head of credit research and strategy at Deutsche Bank, wrote a report for the financial institution claiming that there is set to be a 30 per cent fall in average house values in the country. According to Bloomberg, house prices will come down in line with recent changes, which saw a 0.3 per cent drop in property values in the eight capital cities in Australia, while the number of homes available is also increasing. However, banks may have a hard time dealing with the decrease in house prices and their problems are set to be compounded by a nine per cent default rate, which could affect lending, Mr Medeiros also warned. RP Data recently reported that house prices across Australia are down 1.2 per cent year-on-year, having dropped 2.7 per cent in the first five months of 2011.

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