Australian real estate to fall in value this year

House prices in Australia are expected to fall considerably during 2011, according to The Global Real Estate Trends report.

The drop in value will be a result of government planned spending cuts, austerity measures and higher interest rates, the report explained.

Australia was singled out as one of the top-performing markets during 2010 - alongside Canada, France, Sweden, Switzerland and the UK - thanks to a combination of a high rate of demand matched by "low unemployment rates and tight supply … all of which added to the upward pressure on prices".

Indeed, the global report noted that the world's residential property markets "experienced a modest but uneven recovery in 2010".

However, increasing interest rates will slow up the sector considerably this year says the report.

The news is likely to be welcomed by individuals looking to buy property in Australia, with the falling prices making the market more accessible for investors.

Meanwhile, Economist magazine recently conducted a survey of global housing prices which found that a significant majority of people believe house prices down under to be overvalued.

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