A report from the Sydney Morning Herald in Australia. "House prices are falling and mortgage interest rates are rising and anyone doing anything with property – buying, selling, upgrading or downsizing – is likely scratching their heads about what it means for them. Shaun Hardy, 38, and his wife Megan Maurice, 33, bought a two-bedroom flat in Ashfield seven years ago for $394,000 that was valued at more than $600,000 earlier this year."

"Hardy, a barista, says he is not concerned about the property market going down. 'It doesn’t really concern us,' Hardy says. 'If it means first home buyers can afford things that’s fantastic, it’s not a case of ‘we’ve got ours’. We realised we’re not going anywhere, house prices might be falling but unit prices are falling even more, so thought we’d be comfortable and enjoy our flat more rather than just complain.'"

"Vincent Turner, the founder of online mortgage broker Uno Home Loans says it is usually being able to save the deposit that is the biggest problem for first timers and, with falling prices, that is going to be easier. 'If your time horizon is in excess of 10 years, then seeing a 10 or 15 per cent drop over the next couple of years [in the value of the property] is not the end of the world,' he says."

"Renovation can be a great alternative to paying the significant transaction costs of buying another house. However, it is a better option for those who bought some time ago and whose property is worth more than when they bought. 'It's not such a good option for those who bought only a couple of years ago, as your property will likely be worth what it was at the time you bought it,' Turner says."

"Martin North, the founder of Digital Finance Analytics, says upgraders need to do their homework before applying for another mortgage on a more expensive property. Lending standards are becoming tighter, so you might not be able to borrow more than your current mortgage and that will also be true if your circumstances have changed, he says. 'So it is worth checking this out early. Generally, mortgage borrowing power has been reduced in recent months,' he says."

"One strategy may be to sell, rent, and wait for the market to fall further, before buying. 'That might work, but you are taking a bet on the market. You might be right but you could be wrong,' North says."

"For those trading down; seeking a smaller place to release capital, you may want to bring the transaction forward because larger value homes are falling faster than smaller ones, North says. He also notes that prices have been falling 'more dramatically on the urban fringes.'"