Australian prices are not unusual
The recent rise of Australian house prices is not unusual compared to past trends, according to a new report released by the Australian Bankers’ Association (ABA).
The housing report found that the current price growth has not exceeded the peak rates that were seen before the GFC. “Over the past ten years the price increase in Sydney is unremarkable when compared to other capital cities,” ABA chief executive Steven Münchenberg said. “Since the GFC, volatility in prices has increased, with two periods of quite marked national declines in prices followed by strong rebounds.” Since 2008, property prices in Australia have risen 28%, similar to Canada and Norway where property prices grew by 29% and 34% respectively.
The report also indicated that low interest rates contributed to the strong state of household finances with many Australian households well placed financially to withstand any interest rate rises.
Positive property market in 2015
Price growth in Australia’s capital city housing markets will continue into 2015, according to Dr Andrew Wilson, Senior Economist at the Domain Group. “Buyer confidence has been boosted with the Reserve Bank’s recent interest rate cut and we’ve seen a solid start to 2015 in most markets.
We are expecting buyer activity to remain solid through the Autumn selling season and then moderate as we head into Spring,” Wilson said. The national median house price is forecast to increase 5% in 2015. Wilson expects Sydney and Brisbane to grow by 8% and 6% respectively while Melbourne, Adelaide and Hobart are likely to grow between 3 and 5%. Meanwhile, declining local economies spell fairly modest growth of around 2% for Darwin, Canberra and Perth.
