Weak job growth and rising unemployment pose a risk for mortgage arrears and housing prices, ANZ has claimed.
The bank's Housing Snapshot report has indicated that housing prices are likely to remain steady or fall over the coming six to 12 months. ANZ pointed to dwindling auction clearance rates and rising days on market for properties, saying it showed a "mis-match between buyer and vendor expectations". The report warned that rising unemployment could see a spike in loan delinquencies.
However, the absence of widespread forced sales has protected prices to date, ANZ suggested. The bank also said rebounding economic growth in 2012 and 2013 could see demand return.
"Housing market fundamentals continue to tighten and near record low vacancy rates will eventually drive a renewed acceleration in rents that should encourage investors and first homebuyers back into the property market," the bank said.
The report comes on the heels of new figures from Australian Property Monitors which show house prices continued to fall in the September quarter. The APM Quarterly House Price Report showed national median house prices fell for the fifth consecutive quarter, down 1.6%. Unit prices also saw a quarter-on-quarter decline, falling 0.6%.
Year-on-year figures for APM show house prices nationally falling 3.5%, while unit prices declined 1%. Every capital city apart from Canberra - which edged up 0.9% - recorded year-on-year declines in house prices. Brisbane saw the most marked falls at 6.7%.
The unit market has held up slightly better, with Sydney seeing a year-on-year increase of 0.6% and Darwin seeing strong 7.7% growth in unit prices. Perth experienced the largest decline in unit values at 7.3%.