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Aveling Homes on Why House Prices Are Staying High : Aveling Homes


Perth, Australia -- (SBWIRE) -- 09/23/2014 -- House prices have risen over 10% in Australia during the last year, raising fears of a bubble within the housing market. However, with foreign investment actually down on last year a range of factors are now driving prices.

Low Money Rates

Foremost is the much-discussed historic low cash rate set by the RBA. The availability of cheap money has encouraged many to enter the market and with rates set to stay low for at least the next couple of months, this should continue to encourage growth.

Tax Breaks

The impact of negative gearing, capital gains tax and tax policies that benefit the rich is also helping drive house price growth.

Australia the Prosperous

Added to this is the simple reality that Australia is a more prosperous society than in the past: household incomes have grown, driving house prices in popular areas as Australians look to invest in property. Despite the house price rise, the HBA-CIA Housing Affordability Index recently posted results suggesting that housing has not been this affordable in many years.

Inner City Growth

It is worth noting that Australia is not one market. House prices in inner cities have risen an average of 2% faster than those on the fringe. Popular areas have boomed, whilst regional prices remain highly affordable.

A Buyer’s Market

Whilst the aforementioned factors are likely to see prices continue to grow, the last quarter has shown evidence of slower growth. This, too, is good news for buyers. Slower, sustainable growth averts fears of a bubble and suggests a transition to more of a buyer’s market.

As Charles Tarbey recently asserted, the market is buoyant and the outlook positive.

About Aveling Homes
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