Australia’s Falling House Prices to Hurt Economy

House prices have fallen at their fastest rate in more than six years, fuelling concerns that prices in Sydney and Melbourne may fall “too far, too quickly”, hurt economic growth and drive anxiety among policymakers, AAP reported. The market now predicts house prices could fall by more than 10% in Sydney and Melbourne from their peak by the time the market stabilizes in 2019.  They have already been falling for 10 months straight. Such a result would make the housing market a central issue at the next federal election, due to be held before May next year, as the coalition highlights fears that Labor’s negative gearing restrictions could further dampen the market. Analysts have warned the “worst is yet to come” and that house prices will sink further as demand falls at a faster rate than the decrease in available properties. They suggest house prices across the capital cities could drop by up to 5% a year, on top of the 2.4% slide in the year to July.