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Prices tipped to a fall as debt burden weighs more heavily

Property prices are being tipped to fall quite sharply in the coming year, just as cost-of-living pressures and rate hikes add to Australians' heightened debt concerns.

Photo of apartments towers taken at 45-degree angle, with stormy skies above.
New lending has tanked just as more than half of borrowers reveal they couldn’t afford, or don’t even know if they could afford, home loan repayments or rent if this cost was to rise by around one third.

Whether because of finance commentators predicting large price falls, perceived economic risks or a reaction to several years of unsustainable capital growth, Australians are taking a step back from the property market.

The amount of new lending signed up by the banks has plummeted as relatively slight price falls incite fears of significant declines in the range of 10 to 15 per cent over the next year.

New lending to owner-occupiers dropped by…