Australian real estate prices are rising strongly and show no signs of abating, analysts said yesterday, after weekly sales in one state hit a record A$1.025 billion (US$920 million).
The Real Estate Institute of Victoria said last week saw “the largest dollar volume of transactions ever recorded” amid growing confidence in the economy as people took advantage of low interest rates.
“We’ve seen more physical sales in a week period, but never have they passed the billion dollar mark,” research manager Robert Larocca said.
“So that’s partly a sign of how strong the market is and it’s also a sign that people are spending more than they have in the past,” he said.
Larocca said the surge in sales was the result of historically low interest rates following the global financial crisis and the growing population in Melbourne outstripping available housing.
“People are confident, they are confident because the economy is going much better than they expected it to,” he said.
David Airey, president of the Real Estate Institute of Australia (REIA), said Melbourne was one of the country’s strongest markets but noted that property prices were in general very strong and rising.
“The property market in all Australian capital cities has had a rapid recovery from mid-2009 on, and noticeably in Melbourne and Sydney with property prices rising quite significantly over that six month period,” he said. “I think that will be reflected again this quarter with further growth in all capital cities.”
Airey said Australians felt property was a safe investment, with median house prices rising by 18.5 percent in Melbourne and more than 12 percent elsewhere last year.
“And it’s difficult to see this current period of growth stalling, unless it’s caused by external factors and significant higher interest rates,” he said.
The average Australian house cost A$334,100 in 2005 and the REIA estimate for this year is A$481,310.
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