Australians told to expect ‘longest and deepest’ housing slump

Australians should prepare for the “longest and deepest” housing downturn in the country’s modern history as the full effects of tighter credit and rising mortgage rates are felt, a leading economist has warned.

As figures released on Monday showed that house prices fell across Australia for the 11th consecutive month in August, Paul Dales, the chief economist for Capital Economics in Australia, said values could slide by 12% over the next four years.

Shane Oliver, AMP Capital’s chief economist, also weighed in, telling clients that property prices in Sydney and Melbourne may decline 15% by 2020, implying they have another 10% to lose, given the falls they have

already recorded.

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