Australia House Prices Could Drop 30% in UBS Recession Scenario

Australian house prices could plunge 30 percent under a deep recession scenario analysis conducted by UBS Group AG.

In the worst of five cases assembled by UBS analyst Jonathan Mott, Australia’s 27-year economic expansion ends, unemployment climbs and the central bank cuts interest rates to zero, according to a Nov. 12 research report. He currently forecasts conditions as reflecting the third scenario -- a housing correction -- but warns the risk of a credit crunch “is real and rising.”