Australian Property Prices Fall Fastest since 2009
15 September 2011
Property prices in Australia are falling at their fastest rate for more than two years, meanwhile banks and developers pin their hopes on data showing the market has a current shortfall of around 200,000 homes.
However some feel this shortage is a myth propagated by the government and the banks in order to keep prices high, as once prices begin to fall people begin to face negative equity and repossession numbers grow.
Apparently the figures showing the shortfall in housing take into account those people who cannot afford to buy homes, including those living in trailer parks and the homeless. Some property experts feel a truer figure would show a surplus of 250,000 homes.
Homes in Australia are currently some of the most unaffordable in the English speaking world, with property costing 6.1 times annual income. Average household debt in Australia is currently 155% of disposable income. To put this in perspective, the average in America was 133% just before the sub-prime crash. The median price of property is now AU$455,000, while the average annual salary is around AU$70,000.
In July 2000 the government introduced a payment of AU$7000 to first-time buyers in order to help offset the impact of a sales tax. This fuelled a 15.5% growth in property prices in 2001. Fearing the financial crisis would cripple the market, the government doubled the grant for those purchasing existing homes and tripled it for those buying newly built homes in October 2008. This fuelled growth of 13.6% in 2009.
The average price of homes in each of the eight state capitals has declined by 3.4% this year, which is the most since 2009.