Hold on if you can! House prices are set to plunge by as much as $200,000 - and young buyers are at most risk of losing out

  • House prices could fall as much as 20 per cent property experts are predicting 
  • A downturn in the residential property market could last through until 2020  
  • Drop in prices in Sydney could see up to $200,000 wiped from house values 

By Brett Lackey For Daily Mail Australia

Published: 18:43 EST, 2 December 2018 | Updated: 19:07 EST, 2 December 2018

House prices are set to plunge by as much as $200,000 and young buyers are most at risk of losing out, according to property market experts.

Those who already own property, or those looking to purchase, in Sydney and Melbourne should expect big drops in residential property prices in the coming months.

In November, ANZ Bank forecast a 15 to 20 per cent fall from peak house prices could be seen in Sydney and Melbourne before the downturn is over and, since then, others experts are backing up this prediction.

House prices are set to plunge by as much as $200,000 and young buyers are most at risk of losing out according to property market experts 

House prices are set to plunge by as much as $200,000 and young buyers are most at risk of losing out according to property market experts 

Those who already own property, or those looking to purchase, in Sydney and Melbourne should expect big drops in residential property prices in the coming months 

Those who already own property, or those looking to purchase, in Sydney and Melbourne should expect big drops in residential property prices in the coming months 

This downturn in the housing market could last through to 2020 before any sort of recovery is seen.

Comparison website finder.com.au surveyed 21 property and economic experts with 15 of them agreeing with ANZ's forecast.

AMP Capital's Head of Investment Strategy and Economics and Chief Economist Dr Shane Oliver agreed with the more severe side of ANZ's forecast.

'I have not been expecting a rate hike next year and have been forecasting a 20 per cent decline in Sydney and Melbourne property prices top to bottom,' Dr Oliver said.

Economists' forecasts about a housing market downturn have become more dramatic this year according to finder.com.au insights manager Graham Cooke.

'ANZ's suggested 15 per cent drop would see $145,500 and $118,500 wiped off the average house price in Sydney and Melbourne respectively.

'A 20 per cent drop would see nearly $200,000 disappear from the equity of Sydney homeowners,' Cooke said.

'If we do see these types of price drops in the market, recent home buyers who laid down a 20 per cent deposit could see themselves in negative equity by the end of the year.'

There is some good news, however, with positive sentiment for housing affordability hitting the highest point in a year. This means whose who are looking to buy, particularly young people looking to enter the market, have a better chance of getting a foot in the door.

The majority of experts surveyed also said that they believe the property downturn will lead to less construction.

In terms of renovations, the experts are divided as to whether the downturn in the property market would flow onto into this sector. 

There is some good news, however, with positive sentiment for housing affordability hitting the highest point in a year 

There is some good news, however, with positive sentiment for housing affordability hitting the highest point in a year 

 

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House prices are set to plunge by as much as $200,000 - and young buyers are at risk of losing out

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