A housing update from the Australian. "The scourge of negative equity has spread to Brisbane as the property downturn continues to slug investors and the lower end of the housing market."

"According to Australia's largest mortgage broker, falling property values in parts of Brisbane has led to an increase in the number of owners with mortgages bigger than the value of their homes."

"'In some of the outer Brisbane suburbs we are seeing valuations for house-and-land packages purchased mainly for investment purposes falling short of purchase prices,' AFG executive director Malcolm Watkins said."

"AFG said some new construction projects in that state were being independently valued at 20 per cent below asking prices. 'That's your first classic sign that things are slowing right off and people are becoming far more cautious,' Mr Watkins said."

"However, it is Sydney where prices have fallen the most, with the highest proportion of families facing the prospect of negative equity. 'Many owner-occupiers, seeking to refinance their homes, are being disappointed by the lower-than-expected valuations being achieved,' Mr Watkins said. 'If larger numbers of owners are forced to sell, this will trigger even greater declines, affecting more property values.'"

"Apartment values had fallen by as much as 20 per cent in Green Square, where developers were opting to rent out apartments rather than sell them for fear of further price falls."

"Figures showing a reduction in new home approvals in Western Australia have prompted suggestions that the state's housing boom is coming to an end."

"The Master Builders Association director Michael McLean says, 'The bubble seems to be bursting in WA's housing sector with capacity dwelling units of around 21,000 being met with these latest statistics, which I might add are prior to the latest interest hike, and so that's also going to exacerbate affordability for new home buyers.'"