Based on the figures from Australian Bureau of Statistics (ABS), House prices rose by 6.8% in Australia’s eight major cities in 2014 (3.34% inflation adjusted), after a rise of 9.48% during 2013 (6.47%) inflation-adjusted).

 

For buyers and investors, it is bad news for them because property prices will continue to rise 2015. Even Sydney, the outperforming state still down because of the property shortages. Is Australia’s housing market severely overvalued? Property prices in Australia are rising but it doesn’t mean overvalued because there are some cities have affordable and reasonable house prices. Home buyers are still looking for an upgrade and making sure the constant housing price growth. Interest rate really affects and influence home buyers and it is showing a climb in property competition. There are so many factors affect the house prices. Some cities dragging the underperforming economy that makes the house prices continue to rise.

 

According to HIA Senior Economist Shane Grant, “Overall the trend across the capital cities is one of continued improvement in affordability, with the capital city index increasingly by 2.0% in March 2013 quarter. However the cities of Adelaide, Perth and Hobart each saw declines in affordability.”

http://www.globalpropertyguide.com/Pacific/Australia/Price-History


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The Reserve Bank of Australia risks inflating the housing bubble if it cut rates this week, a leading economist says, as new figures show house prices got off to a flying start on 2015.

 

Further interest rate cuts risk making property even less affordable and it would dangerously imbalance the economy. The price growth is unsustainable and no benefits for the economy. The Australia’s two biggest cities (Sydney & Melbourne) have frothy market.

According to Corelogic RP Data head of Research Tim Lawless, “Lower interest rates could potentially add further fuel to the housing market, particularly the investor segment which continues to remain strong based on recent data.”

 

The Interest rate remains in 2.5%. We need to be carefully watching for the interest rate to further stimulate the housing market. Interest rate should be on hold for the appreciable gain for the whole economy. When the interest rate will rise again, it develops into a housing bubble and the entire economy will be busted.

http://www.theguardian.com/australia-news/2015/feb/02/rba-risks-inflating-housing-bubble-if-it-cuts-interest-rates-say-experts


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