Australian property will remain stable in 2013
News by Propertyshowrooms.com
Stability will be the name of the game for Australian property this year, according to the latest Fitch Rating report. Amid falling real estate prices across the globe, the country will be one of the lucky few that enjoys sector growth, albeit cautiously. Experts predict that house prices will remain flat and mortgage defaults will be among the lowest in the developed world, but double-digit price increases will come to an end.
Capital house prices increased last year by 0.9 per cent, after falling in 2011. However, this is considerably smaller than the 150 per cent growth enjoyed by Australian property between 2000 and 2010. Fitch Ratings believes that this level of expansion is now a thing of the past, with the market becoming stable in 2013. This is despite some contraction in certain areas where prices will decline, such as the Gold Coast.
Nevertheless, Australia will no doubt welcome this relative calm after reports in October suggested the property market is in fact weakening. The Global Property Guide revealed that despite the country’s “strong and resilient economy” the Australian Bureau of Statistics house price index for eight capital cities fell by 2.1 per cent (-3.2 per cent when adjusted for inflation) during the year-to-end-Q2 2012. This was part of a continuous decline that began in Q2 2011.
However, the market appears to have turned its fortunes around, with the latest Housing Industry Association new-home sales report recording a second consecutive month of sale increases. New South Wales and Victoria enjoyed the largest growth of almost 16 per cent, with South Australia registering 6.7 per cent. Nevertheless, house price rises aren’t necessarily good news.
Fitch Ratings analyst Ben Newey said: “Housing is still relatively expensive in terms of affordability, but price growth will be stable in 2013 as the recent run of interest rate cuts works its way through the economy. Arrears rates will also remain flat through 2013, in line with projections for stable interest rates and low unemployment.” International Property and Real Estate News from Propertyshowrooms.com
2013-01-15 17:02:19
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