Don't bank on house price rises

Monday 06 July 2009

Article by Mozo

Despite a national housing shortage, property prices are likely to remain depressed for the foreseeable future, one expert has claimed.

Speaking to ABC Television, Lend Lease chief executive Steve McCann predicted that while the market is unlikely to tumble much further, the outlook for growth remains historically weak.

"We don’t see massive pressure on prices and it will take some time for the economy to get back into full swing," he explained.

And while he painted a less than rosy picture for the Australian property market, the country could be thankful that it did not have the same problems as the US, where excessive development has led to a steep drop in house prices.

Meanwhile, new research carried out by Loan Market Group has shown that two-thirds of Aussies believe that the first-home buyers grant has served to push up house prices, making very little difference to affordability.

The abundance of low-interest home loans may also have supported prices by stimulating demand for new properties.

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