Australia property prices have risen considerably over the past year with homes in Sydney increasing in value by 6.6% while homes in Melbourne increased even more at 8.4%. The bank has responded to this news by increasing interest rates yet again, having increased rates four times last year, and they now stand at 4.75%.
There are signs that these measures may be working as the house price index showed rises of just 0.7% in December, and house prices are expected to increase modestly this year. The National Australia Bank Residential Property Index for December showed a decrease from 44 points to 27 points as tighter lending conditions combined with rising interest rates begin to bite.
The recent floods in Queensland are also expected to have a short-term effect on the property market, although many feel that it will be positive in the long run. It is expected to boost the economy as the building industry and other related industries will be fully employed rebuilding and repairing. There are already huge construction projects planned for Western Australia and the country as a whole is still expected to remain extremely attractive to overseas investors.
Australia is still the country that most Britons would like to relocate to, and economic conditions at home are expected to increase the number of enquiries from those wishing to move abroad. The news that property prices are unlikely to rise steeply this year is bound to be extremely welcome to would-be expats, especially those who have substantial deposits or who can pay for their new home in cash.