Aussies house prices rise as global economy tanks

Average house and flat prices in Australia continued to rise in the first quarter of 2009, bucking a global property slump that is causing misery in countries such as the US and Britain, a new report has found.

The unlikely rise was spurred on by a mix of low-interest home loans, the first-home buyers grant and a straightforward lack of houses in the country, report authors RP Data-Rismark explained.

Christopher Joye, managing director of the group, said that much of the 1.6 per cent increase in value "has been driven by the 40 per cent fall in home loan rates to 5.7 per cent, which are now at their lowest levels since July 1968".

And while some homeowners may be relieved that property prices haven’t tanked yet, the Sydney Morning Herald has warned this week that the Australian economy could be in for a nasty shock if unemployment rates rise much higher.

The paper warned that mass job cuts and home loan interest rate rises could put home loan customers under real pressure to keep up with repayments.

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