Some fear rising interest rates and inflated prices, among other things, may lead to crash
AS prospective home buyers in Australia look for the best time to jump into the market, many of the nation’s top housing analysts have forecast modest residential price growth of about 5 or 6 per cent in 2010, the Australian Associate Press reports.
Some of Australia’s leading economists believe demand for homes will stay strong as investors and upgraders pick up the slack from first home buyers.
But a small group of doomsayers is convinced a combination of rising interest rates, the winding up of the first home owners’ grant boost and over-inflated prices could lay the foundations for a crash.
However, Australia is emerging from the global financial crisis with strong population growth, the lowest interest rates in decades and a rosier jobs outlook.
Most economists, industry heads and real estate agents see the sun continuing to shine on residential property this year.
Annual established house prices in Australia grew 6.2 per cent to September 2009, the latest Australian Bureau of Statistics data show.
Housing Industry Association chief economist Harley Dale said Australia would experience significant 20 to 25 per cent growth in new housing stock through to mid-2011.
He also supports predictions of about 5 to 6 per cent growth in established homes next year.
Source: Business Times, 2 Jan 2010
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