Real estate in Australia

While the property values in the United States, United Kingdom and many Western European countries have significantly declined during the financial crisis world - Australian property values have held relatively well. In fact in some Australian markets House prices actually increased during 2009.

It is interesting to note that Australian property prices experiencing some correction, while the prices in other Western countries continued climb hastily in preparation to the global financial Crisis. 1999 Sydney average house price was $295,000 and a peak was experienced in 2004, when the average price of Sydney reached $596,000. Today is approximately $566,000.

There are many factors influencing the property in any free market prices. These include underlying demand and supply, as well as the interest rates and policy of the Government and regulation. Australian property prices have experienced upward pressure from all these sources in the past 24 months. These factors have contributed to avoiding a significant drop in values in Australia.

Demand for Australian property course

There is a net increase in the demand for housing in Australia. The most important source of this demand is for persons migrating to Australia. Between 2007 and 2008, the Australian Bureau of statistics informs that Australia population grew by more than 400,000 people (or 1.9% of the total population). More than 60% of this increase was overseas migration to Australia.

More anecdotally, there is also a constant structural change in the composition of Australia, home to fewer occupants by housing. I.e. There is a growing number of housing single-ocupante and dos-ocupante.

Net migration of Australia entry and moving to less than occupants by housing provide a structural course of Australia housing demand. This demand from owners of new homes and lessors, puts a pressure rising rents and property prices.

Source Disequlibrium

A large proportion of the population of Australia lies in their capitals and the East Coast, from Melbourne to Sydney and North Queensland Sunshine Coast. While Australia is one of the largest in the world, there are important limitations in the availability of land for new housing in the more populated areas. The result, in places like Sydney, has been a trend towards a higher density of housing, representing apartments and chalets in the interior of the island and smaller batches of home in the newer suburbs, further away from the city.

The costs associated with the new housing development are great, because the Governments of the States and local authorities need developers finance local infrastructure. These 'at-cost', the actual construction cost reduce the profit margins of the developers and well pass to the final consumer through the highest prices, or result in the project be shelved as little profitable.

Banks and other financial institutions have declined dramatically their loans to Australia of builders and developers, which results in less new houses and apartments in construction.

Low interest rates and Government policies

Rates of historically low borrowing from the cheapest mortgages, have helped keep a floor on Australian property prices. There are also some switching of investments by some Australians from the start of the global financial Crisis of values in property markets roots, which often is perceived as less risky.

Addition, the Government has provided financial assistance to eligible Australians to buy their first home. This had a direct impact on the prices of the property up to around $ 600,000 and less directly on the rest of the market as other owners update their homes.

Where from here?

The RBA has already increased the Australia interest rates by 0.25%. And the Government has begun to return their first house grants wind. While these factors have an influence on the rise in prices in 18 months, no one is anticipating a drop in the price of housing in Australia as a result of these two changes.

Demand Australia and supply imbalance is expected to continue. Australia has a permanent migration policy of encouraging overseas, still there is more than the natural growth of the population of Australia (i.e. births in Australia). And there is no structural change which is known that in the pipeline dramatically increase new housing supply in most Australia populated centres.

Some commentators consider the prices of property Australia as too high at affordable prices and with regard to the fall of prices in other countries during the global financial Crisis. This can be simplistic, however, if no attention is paid to the underlying demand and supply factors influencing the price of housing in Australia.

Mark Butterworth is the owner and administrator in http://www.gettingdownunder.com launched in January 2006, the site has become one of the most popular sites and complete website providing free information and advice for those interested in migration to Australia.