There is little evidence that the property market will undergo a sharp correction, according to real estate economist Nerida Conisbee.
Conisbee says even though sentiment has shifted there is little mortgage distress among home-owners at the moment.
As a result, she says it’s hard to understand why so many forecasters were predicting big price drops.
“The conditions are just not in place for the sort of house price declines that some forecasters are putting out there,” she says.
Datt Capital fund manager Emmanuel Datt describes the current forecasts about house prices as “nothing short of ludicrous”. He says low vacancy rates and growing rents mean property remains an attractive prospect for long-term investors.
Datt says in the current market rents are rising at more than 10% a year.
While borrowers may not like increasing interest rates, Datt says they will do everything they can to not default on their loan and will cut discretionary spending and look at cheaper refinancing options.