Home loans customers 'will not face house price crash'

Monday 21 September 2009

Article by Mozo

Home loans customers may be pleased to hear that there will not be a sharp decrease in property prices.

This is contrary to some market speculation – which anticipates a US-style price collapse – and comes from some of the country’s senior economists.

Speaking at the Your Money round table forum, Commsec chief economist Craig James explained there is a housing shortage in Australia, which could pose a problem since the population is growing at a fast rate.

This could be balanced by the fact that Australian housing is more expensive compared to global prices, AMP Capital Investors chief economist Shane Oliver said.

"I think the bottom line is that unless Australia has a major economic downturn its very hard to see the collapse in house prices that some people are worried about," he remarked.

This may be welcome news to those looking for low interest home loans.

Speculation on house prices comes as news.com.au reported first-time buyers may be having difficulty in the current climate as the government is set to remove its first home owner grant.

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