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Re: 2005 and Beyond:The BEAR is BACK ?In the news today:"Treasurer Peter Costello forecast a bleak outlook for house prices last night.He tipped a further dampening of the property market, compounded by a "substantial slowdown" in household wealth.Mr Costello revealed property owners' bricks and mortar -- whether it be people's homes or investments -- could be worth even less next financial year, as less people entered the market and prices continued to slide.Leaving no doubt that the property market is now in a downturn, Mr Costello said the number of people investing in property would fall by 2 per cent in 2005-2006.He attributed the decrease to the plateauing of soaring property prices during the boom and the recent interest rate rise."Dwelling investment fell in the second half of 2004 and forward indicators of activity in the housing sector, such as dwelling approvals, suggest that this modest downward trend will continue," Mr Costello said.Another indicator pointing to lower activity was the number of monthly finance commitments for the construction or purchase of new dwellings by owner-occupiers, which is down 15 per cent on its last peak in October 2003.With a glut of apartments languishing on the market, it will come as no surprise that the investor sector is expected to be hardest hit.Mr Costello said much of the speculative activity in the investor market had passed.He said rental yields on investment properties were still very low, "suggesting that house prices may fall further in real terms".Mr Costello warned: "There remains a risk that a prolonged period of falling or flat house prices may lead to rein in consumption expenditure more than expected."However he said the dampening of the market was merely "the current housing market unwinding in an orderly manner" -- a soft landing with the risk of a sharp fall in house prices abating.He said solid underlying demand for new dwellings and a strong workforce would keep investment simmering.Although the economy was expected to record solid growth, he said the recent interest rate rise and high petrol prices would restrain consumption.With the tax cuts expected to lead to a rise in inflation there could be further pressure on the Reserve Bank to increase interest rates before the end of the year."
Re: 2005 and Beyond:The BEAR is BACK ?
In the news today:
"Treasurer Peter Costello forecast a bleak outlook for house prices last night.
He tipped a further dampening of the property market, compounded by a "substantial slowdown" in household wealth.
Mr Costello revealed property owners' bricks and mortar -- whether it be people's homes or investments -- could be worth even less next financial year, as less people entered the market and prices continued to slide.
Leaving no doubt that the property market is now in a downturn, Mr Costello said the number of people investing in property would fall by 2 per cent in 2005-2006.
He attributed the decrease to the plateauing of soaring property prices during the boom and the recent interest rate rise.
"Dwelling investment fell in the second half of 2004 and forward indicators of activity in the housing sector, such as dwelling approvals, suggest that this modest downward trend will continue," Mr Costello said.
Another indicator pointing to lower activity was the number of monthly finance commitments for the construction or purchase of new dwellings by owner-occupiers, which is down 15 per cent on its last peak in October 2003.
With a glut of apartments languishing on the market, it will come as no surprise that the investor sector is expected to be hardest hit.
Mr Costello said much of the speculative activity in the investor market had passed.
He said rental yields on investment properties were still very low, "suggesting that house prices may fall further in real terms".
Mr Costello warned: "There remains a risk that a prolonged period of falling or flat house prices may lead to rein in consumption expenditure more than expected."
However he said the dampening of the market was merely "the current housing market unwinding in an orderly manner" -- a soft landing with the risk of a sharp fall in house prices abating.
He said solid underlying demand for new dwellings and a strong workforce would keep investment simmering.
Although the economy was expected to record solid growth, he said the recent interest rate rise and high petrol prices would restrain consumption.
With the tax cuts expected to lead to a rise in inflation there could be further pressure on the Reserve Bank to increase interest rates before the end of the year."
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