Australian housing

Report: Prices to stagnate as debt binge ends

the Age

6 September, 2011

Australians are falling out of love with debt and that means house prices will remain flat this year as potential homebuyers hold off tapping banks for bigger loans to land properties, according to analysis by Deutsche Bank.

The reluctance to take on new debt or stepped-up efforts to pay back existing loans will trim households' debt-to-disposable income ratio, a common gauge of indebtedness, by about 10 percentage points by December 2012, the bank predicts.

Even so, the so-called deleveraging will still leave the ratio at about 165 per cent, from about 175 per cent now, still among the highest levels in the world.

For article GO HERE