rockhampton real estate
The Australian Property Market in 2010
February 2, 2010 by Alanna Milletts · Leave a Comment
Experts are struggling to know where the property market in Australia will head in 2010. Like other countries such as the United States, Canada and other European nations some experts predict a drop of more than 20% in property prices, whereas others predict an increase of between 5 and 8%.
One of the main determining factors, that will affect the property market, will be employment. If unemployment rates rise, then only people who have a deposit will be able to purchase real estate and newly built houses. Many predict the unemployment will soar to as high as 8% (compared to 2009 which was 4.5%) and this will decide the real estate price tags.
Back in 2008, the Australian Reserve Bank cut interest rates by a massive 3% which helped many people meet their mortgage repayments and the new strict lending rules, issued by the Australian Government has significantly cut down on the amount of mortgages given to people who would struggle to meet their repayments.
The amount of repossessions coming onto the market has also been cut down due to these strict lending rules which have enabled the market to remain stable throughout the last few years.
The Australian Government has also started a new grant available for first time buyers to help them get onto the property ladder although, again, only beneficial if people can keep up the repayments on their mortgages.
Throughout Australia, debt levels are at an all time high, with more people borrowing from credit cards and banks to keep their heads above water and for people to purchase new properties they will have to take on more debt, which unfortunately they can\’t.
Many home owners are having a hard time paying their debts and many have lost their full time jobs and are now working only part time. Part time jobs increased by over 40.000 in 2008, whereas full time jobs dropped by 44.000 in the same period.
The world economy is another determining factor that will affect the property market in Australia. Other countries such as European nations, the USA and Japan are all suffering a recession and even the big player, China is experiencing a slow down. All over the world will be affected and Australia will not be left out.
Overall, it will be the unemployment issues that will affect the property market in Australia and although predicted to be generally weak in 2010, it should hold out pretty well for the first 6 months or so but where it heads in the next few years is uncertain.
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