Australian Housing Market Slows But Avoids Crash

July 29th, 2013

The Australian housing market is still going strong, with rising house prices and low interest rates, despite a slowdown and predictions of a housing bust.

Neil Jenman predicted a real estate market crash back in 2001, but it never happened. Instead there was a market slowdown. However, house prices went up in Melbourne since then, while Australia’s population increased, causing a rise in housing demand.

Property crash forecasts continue, but prices keep going up. However, there’s always a chance that the property market will crash – just not in the near future, according to recent housing finance data showing increasing property values.

Writer Pete Wargent said that the housing market may be doing well, but in reality it’s slowing down as Australia’s unemployment rate rises and prices remain low in Adelaide, Brisbane and Canberra. Apart from rising prices in Sydney’s housing market, the markets in other states and regional areas are below their previous peaks, thus representing a decline and making houses more affordable.

The housing recovery is in part due to an increase in first home buyers, but it is mostly led by the 24% rise in investors, which resulted in an 81% auction clearance rate in Sydney. This means that inner-city markets will outperform other markets, with Melbourne, Perth and Sydney as the top contenders.