Property prices along the Sunshine Coast may see drops that are significant. Some estate agents are predicting a drop that is as large as 30% in the next 18 months.
The market is being hurt mostly by the rising interest rates seen throughout the market. Additionally, the economy is being hurt by the rise in petrol prices and the fall of the stock market, all of which contribute to the ability of the Australian people to purchase property. In some suburbs, property is selling for less than the original price purchased by owners.
The first sign of trouble has been seen in Sydney where clearance rates have dropped below 50%, which is a drop of 11% over the same time last year.
According to Real Estate Capital Partners (called ReCap), as reported by the Age, the property market is in a recession of sorts.
The Age quoted chief executive Andrew Saunders as saying, "We are in a property recession, and while not a depression yet, that will come if the economy goes into recession."
And, later, "The first impact of the credit crunch on Australian markets is that the cost of funding has risen, which puts pressure on investors. This is evident in the increasing numbers of advertisements appearing in commercial property pages in major markets."
