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Australian Property Market

The Australian property market has been extremely buoyant in recent times.

House prices across Australia increased in every capital city over the last 12 months to June with the exception of Sydney. In the June quarter all capitals increased except Perth. Median prices in all capital cities except Sydney are now at their highest point ever. Over the last 5 years every capital city has experienced a significant upward movement in price over a period of between 12 months to 3 years. Why such a healthy market? Quite simply the Australian economy has experienced an unprecedented 17 years of continuous positive GDP growth.   

In summary apart from Perth and Sydney all capital cities performed strongly over the year. Melbourne and Brisbane have been the two stand out performers. 

This situation looks set to continue with September quarter figures showing an average annual rise of 10.6% across the 8 major city markets. The imbalance between housing supply and demand, record low unemployment, increasing wages and a growing population should ensure a healthy market in the foreseeable future. Braking factors will however be the continued interest rate rises and the impact on credit availability of problems in the US sub prime market. Also, household debt is starting to become excessive and therefore any increase in the unemployment rate will have dire consequences for many people. 

The property market is cyclic and a downturn is inevitable. The best way to insulate yourself against a downturn is to only purchase quality property. Before making such a substantial outlay always obtain independent advice.

Note: the above article is based on figures produced by the Australian Real Estate Institute as at September 2007.

 

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