Australian Property News
Rosy outlook as house prices edge higher
Posted on Tuesday, June 30 2009 at 4:37 PM
Residential property prices will edge higher for the rest of 2009 and the Australian housing market will be well supported over the medium term, according to a report from ANZ Bank.
The positive outlook comes as RP Data statistics show dwelling values in Australia were up 3.9 per cent over the first five months of 2009, meaning they're just 0.1 per cent shy of their peak in February 2008.
ANZ's Housing Snapshot for June 2009 says Australian house prices have proved resilient in the face of the global financial crisis.
The report says any market adjustment when the First Home Owner Boost ends is "likely to be overwhelmed by ongoing and additional stimulus from recent and prospective interest rate cuts and further broadening the recovery from first homebuyers to the 'upgrader' and investor segments".
Population growth is at its highest level in four decades, providing unprecedented demand, while the supply side of the market is being inhibited by high development costs, land availability and developer uncertainty, the report notes.
"We expect dwelling prices to edge higher for much of the remainder of 2009, with upside risk presenting from intensification of strong fundamentals, a shift in price expectations and a restoration in market confidence."
RP Data head of research Tim Lawless says the price data for May 2009 "herald a national residential market recovery".
"It's important to note that it has taken just 15 months for values to recover (to) the February 2008 peak," Lawless says.
"I believe these results are encouraging, especially when we take a closer look at other Western markets around the world where prices are mostly in decline."
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