The price of property in Australia is growing at a rate faster than in any other major economy in the world, a new study has found. However, the fact that they are starting to pick up pace does not mean that there will necessarily be a risk of a property bubble coming to fruition, experts have said, giving investors confidence to keep buying homes down under.
In fact, the quickening of property prices in the past 17 years in Australia has been so fast that it has even defied the global financial downturn and the fall in valuations this brought to remain above all other nations. The latest findings from Fitch showed that since 1997, the price of buying property in Australia has more than tripled. And despite the fact that they saw declines of four per cent when the global financial crisis struck, price growth remains the strongest in the world.
Even the massive recovery in the UK, where prices increased by some 5.4 per cent last year alone, has not managed to match the long-term acceleration being enjoyed across Australia. This was pushed home in 2013 with the news that property prices in the various capital cities across the nation had risen at their fastest rates for more than four years, showing that there remains a strong intent to buy and a very favourable market for investors with a forward-thinking strategy to get themselves into.
However, despite the quick acceleration of prices in recent years, Fitch says that there is no immediate fear of a housing bubble, adding that houses in Australia are still more affordable in relative terms than they are elsewhere in the world. It conceded that compared to income, Australian homes are the second-most expensive homes on earth, behind only the UK, but added that per capita GDP they are actually the second-most affordable. “Australian cities appear expensive relative to those in other countries,” said Fitch’s Global Mortgage and Housing Outlook. “The ratio has, however, been in the same range for over a decade.”