Forecasts that Australian property prices could fall by as much as 40 per cent over the next decade have been rubbished by leading industry analysts.
Late last week, Professor Steve Keen told Real Estate Business that Australian properties could suffer a price slump similar to Japan.
“I have always said we will see property prices fall by 40 per cent over the next 10 to 15 years. In fact, I wouldn’t be surprised to see property prices fall by as much as 20 per cent in the next five years."
But Mr Keen’s comments have been branded “sensationalist” by leading analysts.
“I don’t know what research he has done to back that up, but it sounds rather sensationalist. I wouldn’t expect to see a 40 per cent fall in property prices when we have a growing population and not enough houses to cope for the demand,” RFI’s director Alan Shields told Real Estate Business.
“I would be surprised to see house prices depreciate by 10 per cent let alone 40 per cent over that time period.”
Mr Shields comments were echoed by both AMP chief economist Shane Oliver and HIA chief economist Harley Dale.
Both Mr Dale and Mr Oliver agreed that Australia could be in for a period of softening house prices, but did not expect to see any significant depreciation.
“House prices will continue to rise, if only ever so slightly,” Mr Dale said.