Sydney, 31 July 2008: According to Australian Property Monitors (APM) house prices in the country’s state capitals are set to fall by 10 per cent over the next year. The value of homes across Australia has already fallen to its lowest level since 2004. APM general manager Michael McNamara believes that due to rising interest rates worse is still to come. 'But it's unlikely that Australians are going to see the same sort of widespread abandoning of the family home as it is happening in some parts of the US.'

McNamara said that the implication of falling property prices was that those borrowers who took out 100 per cent loans or those borrowers that flew too close to the sun by taking out loans with very small deposits, may find themselves in a situation very soon where they are sitting on negative equity. 'There is no doubt that the Australian market will see more foreclosures, repossessions and bankruptcies over the coming years,” McNamara warned.