From The Real Estate Conversation.
Housing prices are tipped to fall by as much as four per cent, a major reversal of the previously rosy forecast, according to SQM Research.
The Sydney and Melbourne property markets are overvalued by as much as 45 per cent, based on its comparison of nominal aggregate incomes to housing prices.
This overvaluation is expected to wind down over an extended period of time.
According to the managing director of SQM, Louis Christopher, there were several major indicators that caused SQM to revise its forecast.
“Leading indicators such as auction clearance rates, total aggregated property listings and asking prices suggest further deterioration in market conditions in recent weeks,” Mr Christopher said.
The number of property listings in Sydney has risen by 34 per cent this year.
“They are now at similar levels recorded in 2011, a point in time when. Sydney dwelling prices fell three per cent for the year,” he said.
Despite that, Sydney’s auction clearance rates have fallen to the low-to-mid 50 per cent range, Mr Christopher observed.
“The clearance rate may have dropped further to below 50 per cent in late April,” he said.
