Australian housing prices could fall up to 15 per cent by the end of next year, predict Morgan Stanley analysts, after the prospect of higher interest rates prompted them to downgrade their forecast in May of the “ largest correction in 40 years” for the residential market.
National home values had already fallen within the range of the investment bank’s economists’ forecast decline of 5 per cent to 10 per cent after the federal budget’s changes in May to taxation of property investments. That prediction had put them ahead of other forecasts at the time, said Morgan Stanley’s Australia economist Chris Read and his colleagues.
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