The Property Market In Australia for 2010
Experts are struggling to know where the property market in Australia will head in 2010. Like other countries such as the United States, Canada and other European nations some experts predict a drop of more than 20% in property prices, whereas others predict an increase of between 5 and 8%.
Probably the main determining factor in property prices will be employment. Only people who have a deposit will be able to purchase real estate and new builds if the unemployment rate continues to rise and some predict that unemployment rates will soar to as high as 8%, compared to 4.5% in 2008.
Back in 2008, the Australian Reserve Bank cut interest rates by a massive 3% which helped many people meet their mortgage repayments and the new strict lending rules, issued by the Australian Government has significantly cut down on the amount of mortgages given to people who would struggle to meet their repayments.
These stricter lending rules have also reduced the amount of repossessions on the property market which has enabled the Australian property market to remain relatively stable in the last few years.
The Australian Government has also started a new grant available for first time buyers to help them get onto the property ladder although, again, only beneficial if people can keep up the repayments on their mortgages.
Throughout Australia, debt levels are at an all time high, with more people borrowing from credit cards and banks to keep their heads above water and for people to purchase new properties they will have to take on more debt, which unfortunately they can’t.
Many people throughout the country are having a hard time paying their debts and many have lost their full time work and are now working part time. In 2008 the amount of people in full time employment dropped by over 44 thousand and part time jobs increased by over 40 thousand.
The world economy is another determining factor that will affect the property market in Australia. Other countries such as European nations, the USA and Japan are all suffering a recession and even the big player, China is experiencing a slow down. All over the world will be affected and Australia will not be left out.
Overall, it will be the unemployment issues that will affect the property market in Australia and although predicted to be generally weak in 2010, it should hold out pretty well for the first 6 months or so but where it heads in the next few years is uncertain.
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