Australian property is 'dangerously unaffordable'

Australian property is expensive and an "anomaly" when compared to the rest of the world, an expert has said.

Christopher Chadd, head of research at Property Frontiers, said that the large rise in Australian house prices will mean that property remains unaffordable for many foreign investors and locals in the coming year.

According to the latest RP Data-Rismark National Home Value Index, house prices in Australia increased by 11.3 per cent in the first 11 months of 2009, a stark contrast to falls in much of the western world during the past two years.

Referring to possible British investment in 2010, Mr Chadd said: "Australia did not see the same falls in 2008 that the UK suffered, as a result I believe Australian property on the whole is still relatively expensive and is still dangerously unaffordable to a lot of first-time local buyers."

High property costs have encouraged some bank customers to compare home loans in search of the best deals. Speaking recently to the Australian Associated Press, Lisa Montgomery, head of consumer advocacy at Resi Mortgage Corporation, said that borrowers should consider refinancing in light of further predicted rate rises this year.

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