The Australian housing market is showing signs of a recovery as it witnesses significant house price rises in Sydney Melbourne and Perth average house prices in Darwin outstripped all regions now with the highest median house prices. Australian Property Monitors reveal the average city house price figures:
Sydney- $547,193
Melbourne- $465,113
Adelaide- $417,404
Canberra- $488,213
Perth- $476,180
Darwin- $549,035
It appears that more house sales and fewer properties coming on the market plus low mortgage interest rates are assisting the recovery in the Australian market. The significant rises are giving fears of a boom and bust or housing bubble.
But an economist with Australian Property Monitors, Matthew Bell, said the strength of the top end of the market showed growth in house prices was a well-rounded recovery, rather than a first-home buyer-fuelled boom.
‘‘When you’ve got the top end participating like that, it’s a good indication that you’re getting back to the levels we saw before prices fell heavily in 2008,’’
While the house price correction has been headed off, with Australian housing remaining very expensive it’s hard to see the housing bubble just starting up again.
With household debt levels remaining very high a re-ignition of the housing bubble – to the extent that it would have to be funded by even more debt – would be a worrying sign.
The AMP’s Chief Economist, Dr Shane Oliver says the most likely outcome is modest growth in house prices at a rate below that in income levels such that house prices can continue to fall relative to wages.
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