Lower housing prices could give first homebuyers better opportunities in the new year
A leading industry professional has said that 2012 could see the price of residential property in Australia reduce by as much as 10 per cent in the new year.
Professor of economics and finance at the University of Western Sydney Steve Keen said that there is a real chance that housing prices will go down in 2012 as mortgage holder choose to lower their debts rather than acquire more assets.
Keen told Business Day on December 13: "The main force that will drive prices down is precisely the same force that drove them up - the acceleration of mortgage debt."
While this could mean that those currently in the housing market are less likely to seeking out new properties in the short term, this could help to give those new to the scene a chance to get a foothold in one of the Australian staple assets - property.
With a decrease in demand from existing mortgage holders, the prices of dwellings may fall in response.
However, this could deliver first homebuyers with the incentives they need to get to grips with the residential property market - perhaps to the extent that they are able to take out a loan and enter the fray themselves.