11 Aug 2010
The property market has been seeing a lot of changes lately. Last year we had first-home buyers coming into the real estate market in droves and we saw investors coming in and pushing up house prices, right now however the picture isn’t quite the same.
House prices recently showed their biggest fall in 14 months. Australian seasonally-adjusted housing figures from June (from RP Data-Rismark Hedonic Australian Home Value Index) showed a fall in house prices of 0.7 percent, making for the biggest property market decrease we’ve seen since April 2008.
But what does all this mean for the future of the property market? Are we going to be seeing house prices continue to fall?
All the experts tend to agree that this is a more of a property pause then a property slump. With the Reserve Bank tightening the reigns with interest hikes in April and May this year, the goal was to slow down Australia’s rapidly growing property market, and that is exactly what it did.
Property prices could never sustain the growth that we had been seeing. Houses were just getting more and more expensive, and if they continued along this path soon nobody would be able to afford a new home!
Despite falling house prices though, the property market is actually looking positive for the future. The Australian job market is performing well, there is a high demand for housing and Australian wealth is at record levels.
Plus home prices were still up 10.5 percent in June compared to what they were the same time last year. But we might see home prices start to even out a little bit now.
Overall the message here is that the property market is slowing down and reaching normal levels again but things are looking positive for the future.