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The Australian Property Market in 2010

Todays Date: November 15, 2018

The property market in Australia, similar to other countries such as Canada, the United Kingdom and the United States is struggling to know where it will turn in 2010. Many predict an increase in property prices of more than 5% and other experts predict a drop of more 20% or more.

Probably the main determining factor in property prices will be employment. Only people who have a deposit will be able to purchase real estate and new builds if the unemployment rate continues to rise and some predict that unemployment rates will soar to as high as 8%, compared to 4.5% in 2008.

The Reserve Bank of Australia cut interest rates by a huge 3% back in 2008 which helped many people with mortgage repayments and the new strict lending rules, issued by the Australian Government, cut down the amount of mortgages given to people who would struggle to meet the repayments.

The amount of repossessions coming onto the market has also been cut down due to these strict lending rules which have enabled the market to remain stable throughout the last few years.

The Australian Government has also started a new grant available for first time buyers to help them get onto the property ladder although, again, only beneficial if people can keep up the repayments on their mortgages.

Debt levels are at an all time high in Australia, with more and more people borrowing from banks and credit cards to keep their heads above water. To purchase new properties or new builds will mean taking on extra debt which they obviously can’t.

Thousands of home owners, throughout Australia are having a hard time keeping up with their repayments as many have lost their full time jobs and are now only working part time. A drop of over 44 thousand people in 2008, in full time employment was seen and an increase in part time employment of over 40 thousand in the same period.

Other countries such as the USA, Japan and other European nations are all suffering a recession and even the big player, China has seen a significant slowdown. The world economy is another determining factor and as with other countries, Australia will not be spared.

Overall, it will be the unemployment issues that will affect the property market in Australia and although predicted to be generally weak in 2010, it should hold out pretty well for the first 6 months or so but where it heads in the next few years is uncertain.

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