Australian House Prices Mostly Easing Down

Australian property prices in most areas have been holding steady in the teeth of the financial storm enveloping much of the world.

Part of the market’s resilience can be attributed to the effect of the government increasing the first time house buyers’ grant from $7,000 to $14,000 or even $21,000.

This measure brought out first time buyers in record numbers in January, when they took 26.5 percent of all Australian mortgages – the largest share of the market ever recorded by first time buyers.

Mortgage rates have also dropped, falling from nearly 10% in August 2008 to around 5% in March this year. The resulting improved affordability has also encouraged house buyers into the market.

Australian Cities
Average House Prices
March 2009

City	Average House Price	12 Month Change
Sydney, NSW	$530,000	- 4.1 %
Melbourne, Vic	$445,000	- 0.4 %
Brisbane, Qld	$415,000	- 6.1 %
Adelaide, SA	$405,000	- 2.2 %
Perth, WA	$473,000	- 7.0 %

Graph of Average House Prices ($thousands)
in Australia’s Major Cities
2004 – 2009

Australian Cities
Average Unit Prices
March 2009
(“Units” in Australia are usually apartments)

City	Average Unit Price	12 Month Change
Sydney, NSW	$368,000	- 1.2 %
Melbourne, Vic	$334,000	- 1.2 %
Brisbane, Qld	$334,000	- 2.8 %
Adelaide, SA	$265,000	+ 2.7 %
Perth, WA	$342,000	- 6.6 %

Mathew Bell, Australian Property Monitors’ economist commented:

“Home-buyers have been taking advantage of flat or falling prices in most capital cities over the past year. With interest rates likely to resume their downward path in the second half of 2009, buyers can look forward to the promise of historically low mortgage repayments for some time to come.

“Rising unemployment and a weakening economy still pose the greatest risk to housing but capital city median prices are unlikely to experience large falls, being cushioned by low interest rates, record government fiscal stimulus and an undersupply of housing.

“Despite the likely end of the First Home Owners Boost in the May budget, the fundamentals of the market point to residential property prices stabilising in the second half of 2009 and early 2010.”

Prices courtesy of Home Price Guide.