By state, prices fell 3.8% in Victoria, 3.2% in Queensland, 2.9% in South Australia and the Northern Territory, 1.1% in New South Wales and 0.8% in Western Australia, the survey showed.
The National Australia Bank residential property index fell to -14 in September, from a reading of -5 in June. The September survey indicated that Australian house prices are likely to remain subdued near-term and fall by a further 1% over the next 12 months.
Prices in Victoria are expected to fall 3.2% over the next year, while Queensland prices are expected to drop 1.7%.
On the other hand, New South Wales prices are expected to rise 0.1%, South Australia and the Northern Territory prices are seen advancing 0.3% and prices in Western Australia are expected to climb 1.5%, according to the survey.
By September 2013, house prices are expected to be back in positive territory overall and showing growth of 0.5%, according to the survey. Western Australia is expected to lead the growth, with prices forecast to rise by 3.4%..
“House buyers are now citing tight credit conditions, construction costs and employment security as the biggest impediments to purchasing property. Concerns over interest rates are still significant, but have fallen somewhat as the previous tightening bias reduces,” according to the survey.
However, National Australia Bank economists said that they believe the expectations contained in the survey are overly pessimistic.
“A structural shortage of housing remains nationally, commencements are down, interest rates are expected to stay on hold for some time, and the unemployment rate is low, contributing to high job security. These factors are expected to maintain a floor under house price growth, which we see resuming at below 4% in 2012 after drifting down in 2011,” they said.
The economists also disagreed with the survey’s findings on interest-rate expectations which showed that 20% of respondents now expect interest rates to be higher over the next 12 months, compared with 71% in the June survey, and that interest rates are expected to fall by 20 basis points over 12 months.
“In contrast, NAB anticipates a longer period of inaction by the RBA before increasing rates to 5% in November 2012,” the economists said, For the latest updates on the stock market, visit Stock Market Today
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