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AUSTRALIA’S real estate sector has been hit by a record-breaking global downturn, with house prices falling by as much as 50 per cent in the past 12 months.
Key points:There were over $600 billion worth of properties sold in the last 12 months, the ABS saysThe property market is still far from recovering from the global financial crisisThe market is also set to hit an «historic» decline for a decade, according to the ABS’ chief economistPeter KellnerThe latest data shows the average price of a house in Australia dropped by 50 per, to $2.4 million, in the first half of 2018, according a report by the ABS.
The average price fell 5.2 per cent year on year, from $1.2 million in the fourth quarter of 2018.
But while prices are down, the number of listings on the market is expected to be up by 20 per cent, or $1 billion, over the next 12 months to reach an «epic peak» of 2.7 million.
The ABS has now predicted that the Australian housing market will hit a «historic low» of just over $2 billion by the end of 2019, as the global economy begins to cool.
Key facts:The global real estate bubble is now on a record breaking declineThe Australian economy is set to have a record high annual growth of 2 per cent over the decade to 2020The ABS expects prices to hit a peak of just under $2bn in 2019 and $2billion by 2020The number of houses listed on the national stock market rose by almost a third in the 12 months up to the end-April, the most recent data available.
But with more than $600billion worth of property sold since the global crisis began in 2008, and the market still far away from recovering, there is now a «historical» decline in the Australian property market, according the ABS’s chief economist Peter Kellner.
«It is clear the Australian market is experiencing a huge downturn, and this will have a profound impact on the affordability of homes, and affordability of renters,» he said.
«This will have ramifications on housing affordability, particularly in the longer term.»
Read moreAustralia’s housing market is set for a historic peak in 2019The ABS said it expects prices will hit an epic peak of $2,974,000, which would be a 50 per year decline on the previous peak of nearly $3,000 a year.
But in a sign of how hard the current downturn is hitting the market, the median price of an Australian house has fallen by $1,000 in the year to March, from a peak price of $3.2million in the third quarter of 2019.
While the ABS is forecasting prices to fall by 20 to 30 per cent by the start of 2020, the average prices will fall by an average of 5 per cent each year from 2019.
«The most expensive houses have sold, while the most affordable have sold,» Mr Kellner said.
The data also showed the number and value of dwellings sold was down more than 40 per cent from the previous quarter, with the number down more to 10,000 from 17,000.
«There is a significant amount of empty homes, particularly for first home buyers, and we are starting to see the impact of the housing affordability crisis in some suburbs,» he added.
The numbers are likely to be a key issue for the upcoming election campaign.
In a bid to revive the housing market, Federal Treasurer Scott Morrison has announced a $1 million incentive for new buyers to buy a house.
The government also announced a scheme to help first-home buyers to purchase a house with a down payment of less than $200,000 if they are earning less than 50 per hour, as well as a guarantee to buy in an Australian city.
«When the Federal Government introduced the mortgage guarantee scheme in the 1980s, it was aimed at helping first home owners and was very effective,» Mr Morrison said.
«But with the global economic downturn and the impact that global financial institutions have had on our economy, the housing markets are now set to experience an historic low.»