Australia will see the world's biggest house price declines this year, according to one of the world's major credit ratings agencies, which declared homeowners would have to wait until 2020 to see any recovery.
In a research report released on Wednesday, Fitch Ratings forecast Australian house prices would decline a further 5 percent this year, on top of a 6.7 percent decline from the peak so far, making Australian housing the worst performer out of 24 countries for the second consecutive year.
Fitch also warned that mortgage delinquencies will rise as house prices fall and homes take longer to sell.
It said Australia has now hit a household debt-to-GDP ratio of 121 percent, which is a big risk to the nation's economy going forward.
But it said above-trend GDP growth, decreasing unemployment, and strong net migration should stabilize prices by 2020.
Fitch said the national decline of 6.7 percent as of December was being driven by lower investor demand as regulators imposed restrictions on interest-only and investment lending.
It noted peak-to-trough declines of 11.1 percent in Sydney and 7.2 percent in Melbourne as of December.
"The most expensive quartile of properties has experienced the largest declines with falls of 9.5 percent [nationwide]," the report said.