The Australian property market is not expected to drop, but it is projected to remain steady all throughout this year (2011). Price tags are set to remain within their current levels but would more likely grow moderately in the next two years. This is the unanimous forecast of numerous industry analysts and observers in the country.
Housing market experts note that local property prices could remain flat or slightly rise within the coming months. However, they assert that homebuyers need not worry. Price increases across the country are still low when compared to housing costs in most other developed countries. Thus, it is still the best time to find and buy Australian properties.
Some analysts think price increases in the next two years could be triggered by a couple of factors. First, the housing market would have to undergo a period of correction. And second, it could be due to the chronic undersupply of homes that is being experienced today.
Housing Market – Far From Crashing
A report recently released by an industry group reiterated that the present downward pressure in the industry could be temporary. The same report claimed that the Australian property market was hit in the past years by a so-called ‘perfect storm,’ characterised by lower volume of first-time homebuyers, a weak national economy, and higher interest rates.
Such factors are seen to have dampened property demand by buyers. The combination of such factors, according to the report has led to currently weaker housing prices. Thus, opportunistic property buyers and investors could take advantage of the currently lower costs of buying homes.
Analysts think a stronger growth in economy from 2011 to 2013 would start to influence property prices beginning next year. They also cited a declining unemployment rate, which is expected to fall below 4% by 2013. At the same time, first-time homebuyer activities are set to normalise soon even if interest rates remain relatively higher.
Several property experts warn that high interest rates could still be a detriment to home buying activities of potential buyers. First-time home buyers, who are mostly relying on home loans, may still be held back by the current interest rates. Furthermore, variable mortgage interest rates are still expected to rise.
Interest rates could logically be an important key to how the property market players would react. Currently, the 4.75% interest rate prevailing in the country could be considered as the highest among all developed nations. Such a rate has been on hold for many months now (since November 2010).
But still, in the end, many property experts believe current home prices are still capable of attracting more potential buyers. Demand for available properties are expected to remain high, especially in population centers across Australia like Perth, Brisbane, and Sydney, where the fastest residential housing market growth is expected to rise the highest in the next coming years.
There is no doubt that it is still the best time to buy a property in Australia. Purchasing a new home now would be a wise move before tag prices start to move up beginning next year. By that time, an undersupply may also ensue.