Australian Property Market Slows

Recent figures show that after a ten year period of solid growth the Australian property market has begun to see a reduction in house prices

London, UK (Pryce Warner International) May 31st, 2011 – Increasing interest rates and the government’s withdrawal of a stimulus package for first-time buyers has led to lower or stagnating prices in Australia’s property market.

One of the few countries in the developed world to sustain increases through the recession, Australian property prices rose an average of 7.8% each year over the past ten years, meaning a total increase of 111% over the last decade.

Low unemployment and a strong banking sector have been the chief means of sustaining increasing property prices throughout the recession. This was also aided by government incentives for new buyers and an increasing population.

However the recent slump has been put down to the high value of the Australian dollar, which has seen a fall in the number of Expats buying property. Expats have always formed an important backbone to the success of the market, as especially British Expats tend to retire there in large numbers. With the amount of people emigrating now slowing down, the property market is feeling the effects. In some cases Expats are even opting to sell up, as they are able to turn a profit when converting the money back into their native currency.

A seven fold increase in interest rates have made it more difficult for buyers to acquire the necessary liquidity for mortgages and banks are becoming reluctant to issue them in the midst of falling prices.

Though no serious crash is predicted, experts have stated that Australian property is now a buyer’s market.

David Harra, a Senior Market & Financial Analyst with Pryce Warner International Group, a financial services company for Expats worldwide commented: “Considering the present exchange rate on the Australian dollar it is unsurprising that Expats are reluctant to move and are increasingly selling property. However, the drop in prices now means that Expats are potentially in a strong position to acquire property at a reduced price and thereby enjoy a more stable lifestyle and/or retirement. Anyone considering buying overseas property should always consult professional overseas property groups before doing so to ensure that they are able to get the best price and ensure their overall financial security when relocating.”

Pryce Warner International Group provide International Asset & Investment Management, Independent Financial Advice & QROPS Overseas Pensions.

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By: Aneil Fatania
Financial Editor
Pryce Warner International Group
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