May 17, 2010, Australia – According to the news, there will be decisions to make by the Reserve Bank of Australia on whether it will increase interest rates for the sixth time since October. This is the effect of the shortage with first time home buyers in the country. There will be an increase on house price if the issue continuous. House prices increased by 20 per cent for the duration of the year to March, the fastest pace recorded by the Australian Bureau of Statistics data series in which it was started in 2002. The national increase for the quarter was reported 4.8 per cent.
In addition to the report, the city of Melbourne has been the first one who increased their house price with a 6.7 per cent increase over the quarter, followed by Sydney, with an increase of 5.3 per cent in the same period. This figure is recorded by the ABS.
From the statement of BIS Shrapnel senior economist, Jason Anderson, said the first home owners grant boost scheme, which ended in December, had pulled demand forward. First-time buyers with a total percentage of 28 per cent of housing loans mid last year, but fell to 18 per cent of mortgages in February. This will certainly have an affect to the house market and house for sale industry.
With a prediction from BIS Shrapnel regarding the fast changes in the industry stated that national house price growth will slow to 6-7 per cent for 2010 as affordability issue bite.
“This year we will be living through what the world looks like without the government stimulus,” Mr Anderson said.
Source: The Australian News
