Australian property prices rose 4.8% in the three months to December from the previous quarter, bringing the national average property price to $525,524 Australian dollars or approx €347,414. According to Australian Property Monitors, they expect prices will rise by as much as by another 10% this year.
So what are the Australians doing that we aren’t?
A lack of supply is helping keep prices … high and construction of new homes across Australia will struggle to keep up with demand this year due to Australia’s land use regulations. Land use regulations are laws enforced by the ozzy’s which govern land use planning in order to manage urban growth. The land use planning system helps to establish the conditions needed to protect and create attractive and efficient urban environments. Therefore there is a restriction on the number of properties built in Australia every year.
Along with Land use regulations, sales of newly built properties doubled in the December quarter from a year earlier. The jump was driven by a first home buyers’ grant there, which favoured purchases of new properties. Not only that but higher prices for existing properties relative to land and building costs in some parts of the country also drove demand for new houses.
However while this might sound all very positive, reports from Australia say that the rise in property prices means that an increasing number of owners are now struggling to meet their mortgage payments. According to a survey from the Mortgage Finance Association of Australia about 16% of property owners are struggling to pay loans.