Australian housing market one of the best in the world.
Australia’s property market continues to soar as sales figures reveal million dollar homes are selling at a rate of one every two hours.
The Australian property market was named as one of the world’s best property markets just a few days ago as the market rose by up to 20% in the last year alone, but experts are predicting that this rise is unsustainable and some are even warning of a situation similar to the housing market crash in the UK and Ireland.
The reason Australian house prices are rising so fast is a combination of low interest rates, first home buyer’s grants, population growth and, more controversially, overseas investors.
Government statistics show a 30% increase in lending to investors, whilst lending to first time buyers fell by 10%. Many investors are buying because they view Australia’s housing market as a better risk than the stock market. So long as house prices continue to rise, they stand to make a profit from sales.
However the government have now tightened the regulations on international purchases in a bid to curtail too many overseas investors and many think that this, along with major new build projects throughout Australia, will be the start of a slowdown in the housing market.
But for the moment the Real Estate Institute of Victoria reported a record number of properties auctioned over last weekend and around 7-9% of their sales are over a million dollars. They told they news.com website that another 880 auctions in Melbourne were expected over this weekend with many being sold before they even make it to auction.
So the advice for anyone looking to buy in Australia is to bide their time. Indications are that although the top end of the market is still performing well, there are signs that a slowdown is imminent. It is doubtful that Australia will see the kind of property crash that affected the UK and Ireland because the banks adopt a much stricter lending policy, however the rise in prices is unsustainable in the long term and many new builds will force prices back down to a more realistic level.
If you are planning to emigrate to Australia, our advice would be to rent first and keep your eye on the market. Have a look at our Australian property guide for more advice.
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