China drop to hit house prices hard
March 9, 2012
THE predicted slowdown in China's economic boom could cause Australian house prices to plunge by more than 5 per cent this year, according to one of the world's most influential credit rating agencies.
Standard & Poor's warned that efforts by the Chinese government to deliberately slow its economy over the next 12 months will have a major impact on Australia's exports throughout Asia.
Earlier this week, the Chinese government cut its gross domestic product growth target to below 8 per cent for this year. It is the first reduction in that estimate in eight years - a recognition that the country's rate of growth is not sustainable.
''Australian house prices could decline by more than 5 per cent in 2012 if China's economy experiences a soft landing with GDP growth at about 8 per cent,'' it stated.