House prices set to rise in 2013

Much of Australia can expect a spike in house prices in 2013 thanks to the cut in interest rates lowering the overall cost of owning a home loan.

According to REIA (Real Estate Institution of Australia) president Peter Bushby, Australians can expect a rise in house prices due to increased affordability and recent interest rate cuts. "The rate cuts were a step in the right direction, and should encourage investors to start looking at investment properties," Mr Bushby said.

The high demand for rental properties was also expected to increase the attraction of buying a home. Despite house prices for capital cities falling 0.6 percent in the September quarter, rental apartments and dwellings went up by 1.2 percent, according to the Bendigo Bank/Real Estate Institute of Australia real estate market report.

The APM (Australian Property Monitors) State of the Market report was also released on Wednesday and forecast average house prices were set to rise by three to five percent in 2013. Perth and Darwin were expected to have the largest growth, whilst Hobart, currently the cheapest capital city to buy a property, would remain flat.

Investors and first home buyers are advised to compare the home loan market and seek out the best possible home loan interest rates when buying a property, to avoid paying larger than neccessary interest repayments on their loan.

Have a question about home loans? Ask the gurus at Mozo Answers.