The Australian trend (01-07.02.2010)

Last week, the Australian Bureau of Statistics and a number of consulting companies have published data regarding the local residential property market. It may be noted that indicators were subjected to certain changes, which were caused by the governmental regulation of the market.

Statistics reveal that over the past year, Australian housing sales and prices have demonstrated a steady growth at around 7% and 12%, respectively. This is explained by the high demand for residential properties, which has been fueled by the influx of migrants, as well as some supply crunch.

In order to avoid the market overheating, the government has implemented several measures. The most important were raising mortgage interest rates and reducing governmental subsidies to first-home buyers.

According to the experts, these governmental actions have resulted in housing sales declining by 4.6%, December-to-November 2009. Prices have not yet started reacting on the specified changes. The December price decline (- 0.3%) is related to seasonal factors, experts claim. They are, however, expecting to see a significant slowing of housing appreciation in 2010.

We would like to notice, that a property boom in Australia has also triggered the growth of building activity, which in turn, has affected in increasing prices on land plots for construction. Over Q3 2009 their value has climbed up by 5.7%, compared with the preceding quarter.

Specialists of the Australian property market claim that the state should also exert influence on the segment of land plots. In particular, they propose to allocate additional land for construction.

Thus, the measures of Australian government, aimed on regulating the local market prove to be rather effective.