Interest Rate affects Housing Affordability

by joy.manginsay 19. March 2012 17:26

Last March 7, 2012, Real estate Institute of Australia’s (REIA) December quarter, Deposit Power Housing Affordability Report has recorded improvement in housing affordability in 2011. Homebuyers are entered in the market but nowadays potential homebuyers are dropping because of the economic uncertainty and interest rate rise. Is the Interest rates affects housing affordability? Is the key factor why buyers are scared off to purchase?

According to Deposit Power’s National Manager, Keith Levy, “Interest rates have a big impact on affordability for existing homeowners and can also be major deterrent for those looking to enter for the first time.”  In a positive side of the picture, first home buyers have experienced a small  increase and are returning to the market in which consumers’ confidence will be back and hoping that there will be changes to improved affordability. Interest rate cuts really help in growing confidence in property market.

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Perth will begin to Rebound Next year

by joy.manginsay 20. December 2011 18:03

Australian Property Monitors Economist Andrew Wilson expects the tide of turn next year, tipping Perth as the first state to make a comeback in what has been a poor year for the property market nationally. He expects that property values will increase 5-10% next year equal to Brisbane and Darwin in which the said two cities are ahead of the other capital cities in WA. Perth property values shed an average 6% in the year, more that the national average of -4.2%. Property analysts also are predicting that Perth market will begin to rebound next year.

According to Real Estate Institute of WA President David Airey said, “He expects the WA property declines to bottom out within 6 months before a recovery by the middle of 2012. First-home buyers entered the market in which proves that the market has been very strong and it is a good stimulus to upgrade the market.

Head of Property Research at ANZ Bank, Paul Braddick said, “WA’s property bust would bottom out early next year at a $420,000, followed by a “quite strong” recovery.” As we observed, WA has starting to recover and mining sector employees and aspirational home-buyers coming-out to the market, this could well prove that the market has starting to flatten. If there will be higher wages, the stock markets will be recovering, the house price will be increasing, the investments will be improving, so therefore, there will be a confidence to expects that the City will be recovering.

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