The Australian housing market will start to soften, a new ANZ report said.
ANZ Economics’ Australian Housing Snapshot said that the market would be defined by a behavioural shift to caution.
"Weak sentiment will see house prices continue to drift sideways to lower over the coming six to 12 months," the report said.
ANZ expects that an increased national housing shortage may add more downward pressure on available rental homes and will increase prices.
“Near record low vacancy rates will eventually drive a renewed acceleration in rents that should encourage investors and first home buyers back into the property market.
“Assuming domestic economic conditions remain stable enough to support household finances, the national housing market should continue to simmer, avoiding the recent boil over experienced by many other developed economies through the global financial crisis.”
A shortage of available houses and a tight rental market would help to keep dramatic price falls in check, and there may be a rebound in economic growth in 2012 and 2013, the report suggested.