NEWS
Australia’s house prices are heading for a mixed year.
Many experts say removal of the First Home Owner Grant and rising interest rates are set to have an adverse impact on properties at the lower end of the market, while properties at the middle and upper end will be supported by buyers trading up, strong immigration and population growth, and a resilient economy.
According to John Edwards of property research company Residex: "Properties at the bottom end of the market enjoyed growth of around 15 per cent in 2009, and owners will use that equity to trade up, providing a fillip to the mid-sector.''
Australian Property Monitors economist Matthew Bell thinks average property prices nationally will rise by 7-10 per cent.
"I don't think interest rates will become a negative factor until mortgage rates hit 7.5-8 per cent,'' he says.
"We have looked at the past three rate-rise cycles, and prices rose in two of them and were broadly flat in the third. The only time prices fell was from March 2008 to March 2009 and that was because of the global financial crisis you can't blame that on rates."
Source: News Limited
Published: 29 December 2009