Australian housing market set to tumble by 20%
Australian house prices are forecast to plummet by 20 per cent over the next two years, a global strategist has revealed.
According to Investec Asset Management's Michael Power residential property prices will fall a further 18 per cent by the end of 2014, adding to the already 6 per cent drop over the last two years, The Age reported.
Mr Power attributed the predictions to the overvalued Australian property market, which is one of the highest in the world according to the Economist Property Index.
But, it might not be all doom and gloom, with market conditions becoming more favourable for potential buyers, helping more Australians get a foot on the property ladder.
A recent report published by the Economist Magazine revealed Australia's real estate sector was overvalued by 36 per cent above their fair value - ranking at number 13 out of 21 global property markets.
Mr Power said an overpriced housing market "catches up with you" eventually, which would become evident over the next two years.
While Australia boasted some of the world's priciest real estate, a number of other countries trumped the country, including Hong Kong overvaluing property by 64 per cent, Singapore at 58 per cent and Canada with 54 per cent.