How much further could house prices fall? - ABC News & Headlines – Australian Broadcasting Corporation

Australian house prices fell for a sixth straight month in September, and experts say the property market could experience falls of up to 15 per cent in the coming months off the back of higher interest rates and cuts to housing tax breaks.

Cotality's Home Value Index fell 1.1 per cent in September taking cumulative declines to 5.2 per cent below March's peak.

Editor's note: An earlier version of this story suggested the auction resulted in investors purchasing the property, the audio has been changed to reflect it was actually won by first home buyers.

Cotality's Home Value Index fell 1.1 per cent in September taking cumulative declines to 5.2 per cent below March's peak.(ABC News: Darryl Torpy)

Experts say the property market is likely to continue experiencing falls of up to 15 per cent in the coming months off the back of higher interest rates and cuts to property tax breaks.

As house prices fall across the country, first home buyers are eager to try to break in, but many are still missing out."First call at $850,000. Second, at $850,000, third, and final call at $8500,000 we're selling. Selling! Sold"In Athelstone in Adelaide's suburbs a 3-bedroom home that mostly had interest from first-home buyers, was over the weekend snapped up by investors.Cotality's research director Tim lawless says across the capitals, almost every suburb has recorded value declines over the past three months but that higher interest rates are making it hard for first time buyers to get loans. "We are seeing housing values falling by 1.1% nationally. This is the sixth month in a row where the market's been down." And with more rate rises tipped over the coming months, he thinks house prices could fall up to 15 per cent in the coming months.it really depends on how far the interest rates rise and when do we actually start to see the RBA moving into a more dovish period where rate cuts might be on the agenda. Queensland developer Soheil Abedian is also predicting similar house price falls. "If (there is a )10-15% reduction we have in the value of the homes, number of the bankruptcies that we have witnessed in the last four months, that increases rapidly and will damage the industry more."AMP chief economist Shane Oliver also predicts house price falls of up to 15 per cent but doesn't think there will be another rate hike on Melbourne Cup Day… since the highest rates in 15 years means it's already biting. "Roughly speaking, an average wager owner of $109,000 will see about an $11,000 reduction in how much they can afford to pay a home as a result of a same size reduction from how much the bank will lend them. Now if you add that together with the four rate hikes (that happened) this year, it's about a $45,000 reduction in terms of their capacity to pay compared to the situation back in January this year. For a couple, it is roughly double that."But Mr Oliver says there's also a risk that if the Iran war drags on, oil prices skyrocket to $150 a barrel and people begin to lose their jobs, property price falls would be even higher.