Property prices in Australia are continuing to fall, as new figures for June show they have now declined for three straight months. One index showed that property prices in eight major cities dropped by 0.1% during the last quarter, and they are now at their lowest level since 2009. However the price falls in some cities were much larger, as property prices fell by 1% in Perth, and by 1.6% in Darwin. They are still continuing to rise in some cities as they increased by 0.4% in Sydney, and by 1.1% in Canberra.
Australia currently has the highest interest rates in the developed world, at 4.75%, although it has just been decided to keep rates the same for another month in spite of worries over high inflation figures. Rates have been increased seven times between October 2009 and November 2010.
The number of permits to build new homes, or to renovate existing houses and apartments fell by 3.5% from May, and building approvals have fallen by 15.5% year on year to June. This was unexpected as economists had been predicting a 3% increase in approvals during June, and a 10.3% fall for the year. Some analysts are taking the view that a fall in building approvals is good for house prices and should ensure that there aren't any real significant price drops in the future.
In spite of these gloomy figures, the medium to long-term outlook looks good, as economic growth is expected to boost the housing sector. There is a strong underlying demand for new homes, as around 135,000 units are built when there is a need for 200,000 new homes annually.
No comments:
Post a Comment