While the chances of a housing collapse remain remote, a period of softer or stagnant house prices is likely this year, Moody's said. Noting declining foreign investor interest and tighter domestic policy, including six interest rate hikes from the Reserve Bank of Australia in its last seven meetings, the surging momentum in home prices last year is over.
It added cracks are beginning to appear in the local housing market and there is a growing sense pricing has now stalled. "In any event, the 20% appreciation in Australian house prices last year will not be repeated in 2010," they said.