Housing Prices Drop in Australia Amid Financial Turmoil

Well it appears the drop in home prices that brought about the economic disaster in the US has now officially reached the Australian housing market as well:

MANY of the nation’s most prestigious suburbs appear to be facing house price slumps amid the credit crunch as their cheaper outer-suburban counterparts begin to emerge from years of price declines, The Australian reports.

House values in Sydney’s inner and eastern suburbs fell 8 per cent in the six months to September as the credit crunch hit top income earners, according to data compiled by Australian Property Monitors.

But at the same time, house values in Sydney’s western suburbs – long derided as the worst performers of the nation – fell just 2 per cent as new-home buyers sought better value in those long-depressed regions.

Adviser Edge economist Louis Christopher said the tanking of the stock market amid the credit crunch meant many wealthier home owners were forced to sell up to cover share margin calls or because they had lost their jobs in the finance and banking sectors.

“There are lots of desperate sellers at that top end of the market, with many of them forced to sell, and sell very quickly, because of what’s happened in the stock market,” Mr Christopher said.

RP Data research director Tim Lawless said the trend was a national phenomenon with first-home buyers taking advantage of lower interest rates and cheaper prices in outer areas.  [The Australian]

I am glad I did not purchase a house last year in Australia.  I was very close to buying a home and decided to wait a little while longer for job related reasons and that decision for me has at least worked out, but unfortunately not for some current home owners in Australia’s suburbs.