The end of the Government's first-home buyers grant boost and various state-funded benefits could force down lower-end house prices by up to 10 per cent.
The warning from CB Richard Ellis coincided with Australian Bureau of Statistics figures issued yesterday that show the number of dwellings bought by owner-occupiers in May was 29 per cent higher than in October, when the federal boost was introduced.
CBRE manager of residential research Erin Rolandsen said first-home buyers were responsible for 95.2 per cent of the increase.
"The fact that first-home buyers have been driving this boom leaves the sub-$500,000 market particularly vulnerable once the boost is reduced from September, 2009," Ms Rolandsen said.
She said worse would follow after the boost is withdrawn at the end of December, along with the withdrawal of state-funded measures in July next year.
"We expect falls could reach 10 per cent from the peak in some areas, depending on local market conditions," she said.
The CBRE forecast is based on market analysis from the agency's recently issued ViewPoint report.
Ms Rolandsen said the benefit of the $7000 boost for existing homes and $14,000 for new dwellings had been wiped out by the stampede of first-home buyers getting into the market.
Since the the boost was introduced, rising house prices had increased the average first-home buyer loan by $20,000.
Ray White announced yesterday a 33 per cent increase in June sales compared with sales in June last year.
Ray White deputy chairman Sam White said total June sales were $2.411 billion, compared with $1.8 billion last year. He predicted investor-driven growth for the second half of this year.
