While the value of properties in the US and UK has fallen to a great extent owing to the global financial crisis, it is Australia’s property value that holds up well. Since the year 2009, the price of houses is increasing. Indeed, the pricing of Australian property experienced some bit of rectification while the price of houses in other western countries remains the same or climb precipitously. When the price of a median house in the year 1999 in Australia was $295000, it experienced a peak in 2004 when the price got raised up to $596000. Today, the value of the property is $566000. In any of free markets, some factors affect the property pricing. They are the demand and supply, the interest rates, government regulation or policy. In fact, the property prices have experienced an upward pressure when all such factors combined. Under the leadership of Joseph Nahas, the housing market of Australia seems to get slower amid the steady economic growth.
Melbourne sees a rise in property prices
We can see that Melbourne has experienced the greatest rise in property prices since the early 2000s. Residential property prices rose by 8.2% during the second quarter of 2016. Melbourne is followed by other cities and places like Canberra, Hobart, Brisbane, Sydney, and Adelaide.
New South Wales has the most expensive homes
Sydney and New South Wales has most expensive houses when talking from the context of the entire country. The average or mean price of the house here is AU$880,000. On the other hand, Tasmania has the cheapest homes where the price is just AU$320,000. As per the Reserve Bank of Australia, the risk of the housing bubble in Australia has diminished. As per the researches by leading economists, the price of houses in Australia has increased by up to 40% since the last year. But, Sydney housing market falls under the bubble risk category. As per the reports, the price of houses in Sydney increased by 45% in 2-3 years while the income and rent yield seems to have stagnated. Housing market risk is heightened in Australia, and it is truer in Sydney. When it comes to Australia’s economy, it grew by 2.4% in the year 2015.
What is leading to the increase in the price of houses?
You may be wondering about the surging prices of Australian houses. The increase in the price is mainly attributed to growing demand for the houses from foreign investors. Foreign investment application has surged by 60% in the realm of Australia’s residential real estate. But, still, we cannot ignore the taxes and the fact that lending standards are getting tightened. This is again weakening the demand for property by the foreign investors. But this prevented the crash of housing boom. The demand for Australian houses has increased. Many migrate to Australia and settle down here.
As there is a net increase in the demand for Australia’s houses, the situation looks favorable for the buyers. The prices are sure to rise due to an increase in demand for homes. Now there is a more shift towards fewer occupants in each dwelling.