CBRE's global chief economist has given a philosophical assessment of Australia's housing market at the company's Annual Market Outlook event in Sydney.
CBRE's global chief economist believes Australia's property outlook is "reasonably good", despite new figures from the ABS indicating further price falls.
Speaking at CBRE's Annual Market Outlook event at the Sydney Convention Centre, Professor Barkham said a comparison of housing markets around the world highlighted that the current market conditions did not represent a serious correction.
"If you look at prices per square foot, Australian housing prices are not out of line globally, so you should not overstate the downturn in the housing market," he said.
"(Australia) is a little exposed on the construction side, because it's share of construction as a percentage of GDP is relatively high, meaning the housing downturn feeds into the construction sector.
"However, if you look at the Australian economy, you have plenty of monetary policy options, you can cut interest rates and the government balance sheet is extremely healthy."
BIS Oxford Economics Manager Angie Zigomanis. Source: BIS Oxford Economics
Mr Barkham's comments coincide with the release of the ABS Residential Property Price Indexes, which revealed a 2.4% fall in the national residential price index for December 2018 quarter.
The data indicated the decline was largely weighted toward the Sydney (-3.7%) and Melbourne (-2.4%) markets, with Adelaide, Hobart and Canberra the only markets to record positive growth in 2018.
BIS Oxford Economics Manager Angie Zigomanis said a fall in investor demand would continue to underpin a decline in prices.
"The weakness in prices and likely concerns about further falls will continue to play on purchaser sentiment through 2019 with further price falls in Sydney and Melbourne expected," he said.
"The other markets have not had the same exposure to investors or issues with affordability, which points to prices holding up better.
"Nevertheless the decline in investor demand will impact across the board while rising supply is also having an impact across most markets, and any prospect for price rises in the other capital cities will remain limited, with small falls in some markets still possible."
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