Certain economists may be predicting an average property value rise of up to 10% in 2013, but lingering unaffordability has left some commentators unconvinced.

In an article published in Your Investment Property’s sister publication Australian Broker last week, it was noted that the decline in home prices has already showed signs of slowing down, with some industry commentators pointing to recent RBA rate cuts as likely to ‘continue to feed through to the economy and have an impact, particularly on housing’.

But the Herald Sun’s National Economics editor, Jessica Irvine, says investors shouldn’t be swayed by trend.

“To claim housing affordability has dramatically improved is kind of like saying today is stinking hot, so winter will never happen again. Interest rates move in cycles and the historical average for mortgage rates is about 7.5%.”

Irvine says that, though they won’t be getting any cheaper, house prices aren’t going to rise substantially either. She says a more “sober” look at the country’s property market shows prices have struck a wall, although they remain historically expensive.

The latest Residential Mortgage Briefing, published by credit agency Finch, predicts the Australian housing market will be among the more stable global markets in 2013, but also says house prices won’t rise.

“Fitch expects stable house prices in 2013, although some areas may still continue to decline … Despite the RBA recently cutting the policy rate, home buyers remain cautious and have been deleveraging.”

RP Data reports show capital city house prices peaked in November 2010 and Irvine says that, just over two years later, they remain at almost 6% below that peak.

“Over the past five years, home prices have clocked average annual growth of just 1.9%. You would have been better with your money in the bank.”

The Fitch report depicts Australia’s mortgage lending market in a positive light, describing it as being “characterised by relatively low default probability assumptions”.

“Arrears are likely to remain low, in-line with low unemployment and recent policy rate reductions. Australia benefits from a low and relatively stable recent history of unemployment, due to strong global demand in commodities. The recent cut in policy rates aims at stimulating the non-mining sectors of the economy.”

However, Irvine says housing in Australia remains expensive and says we ‘only have ourselves to blame’.

“A lucky generation of older Australians grew wealthier as house prices rose. But they did so at the expense of their children. It's hard to see property prices rising much this year, unless something radically new happened to boost people's capacity to borrow.”