January 2, 2009 - 2:08P
Australians could find 2009 an opportune time to buy property, but they should not expect a swift recovery in housing prices.
Loan Market Group executive director John Kolenda says low interest rates and subdued property prices combined with government initiatives have made entering the property market easier, particularly for first home buyers.
Australian policy makers have provided stimulatory measures in the second half of 2008 to boost the domestic economy.
Since September, the Reserve Bank of Australia (RBA) has cut the cash rate by three percentage points to a seven-year-low of 4.25 per cent.
In October, the federal government doubled the first home owners grant to $14,000 and increased it to $21,000 for buying or building a new home.
Debt futures markets are pricing the cash rate to be as low as 2.5 per cent in June, while many market economists predict at least another one percentage point cut in total by the central bank.
"Despite the global economic uncertainty, the conditions in Australia for those seeking to enter the property market are ideal," Mr Kolenda said.
"Mortgage holders in the coming year are likely to benefit from the lowest variable interest rates ever offered in Australia as the cash rate could fall to 2.5 per cent."
House prices have been sluggish across the eight capital cities in the past two quarters, down 1.8 per cent in the September quarter, the Australian Bureau of Statistics' (ABS) said.
This followed a 0.2 per cent drop in the June quarter.
CommSec chief economist Craig James said property prices would rise moderately this year due to an undersupply of housing.
"Overall, national housing prices are tipped to grow by three to five per cent over 2009 with major variations across the regions," Mr James said.
Mr Kolenda said the rise in the grant had stimulated interest in the lower half of the housing market.
"These concessions will continue for the first half of 2009, while we also expect to see home mortgage rates fall further, encouraging a variety of buyers, including Australians returning from overseas," he said.
The peak home building body, the Housing Industry Association (HIA), forecasted a recovery in the property market in the second half of 2009.
"We will be into 2009, possibly some months through, before these lower interest rates translate into a significant stimulus to housing sector expenditure," HIA chief economist Harley Dale said.
Loan Market Group executive director John Kolenda says low interest rates and subdued property prices combined with government initiatives have made entering the property market easier, particularly for first home buyers.
Australian policy makers have provided stimulatory measures in the second half of 2008 to boost the domestic economy.
Since September, the Reserve Bank of Australia (RBA) has cut the cash rate by three percentage points to a seven-year-low of 4.25 per cent.
In October, the federal government doubled the first home owners grant to $14,000 and increased it to $21,000 for buying or building a new home.
Debt futures markets are pricing the cash rate to be as low as 2.5 per cent in June, while many market economists predict at least another one percentage point cut in total by the central bank.
"Despite the global economic uncertainty, the conditions in Australia for those seeking to enter the property market are ideal," Mr Kolenda said.
"Mortgage holders in the coming year are likely to benefit from the lowest variable interest rates ever offered in Australia as the cash rate could fall to 2.5 per cent."
House prices have been sluggish across the eight capital cities in the past two quarters, down 1.8 per cent in the September quarter, the Australian Bureau of Statistics' (ABS) said.
This followed a 0.2 per cent drop in the June quarter.
CommSec chief economist Craig James said property prices would rise moderately this year due to an undersupply of housing.
"Overall, national housing prices are tipped to grow by three to five per cent over 2009 with major variations across the regions," Mr James said.
Mr Kolenda said the rise in the grant had stimulated interest in the lower half of the housing market.
"These concessions will continue for the first half of 2009, while we also expect to see home mortgage rates fall further, encouraging a variety of buyers, including Australians returning from overseas," he said.
The peak home building body, the Housing Industry Association (HIA), forecasted a recovery in the property market in the second half of 2009.
"We will be into 2009, possibly some months through, before these lower interest rates translate into a significant stimulus to housing sector expenditure," HIA chief economist Harley Dale said.
(Source: smh.com.au)
