Strong demand and historic low interest rates should see the Australian property market through a challenging year ahead.
Residential prices finished weaker in the last quarter of 2008 but continue to perform markedly better than international counterparts.
While the US and UK housing markets have plummeted strong market fundamentals are expected to see the domestic market avoid any substantial downturn over 2009.
Figures release by RP Data and Rismark on Friday afternoon showed national dwelling values fell 1.1 per cent in the December quarter and 2.6 per cent over the course of 2008.
Individual market results for the year ranged from 11.5 per cent growth in Darwin to an 8.8 per cent correction in Perth.
Australian Property Monitors figures released today also showed weak figures for the December quarter.
While the figures confirm Australia’s property prices are not immune from the economic slowdown, the outlook for 2009 remains stable, according to RP Data and Rismark.
Tim Lawless, RP Data national research director, said Australia’s critical dwelling undersupply had, and would continue to underpin domestic dwelling prices.
Current market conditions will in fact make the property market the most attractive in 2009 as it’s been in decades, Rismark CEO Christopher Joye added.
“With futures markets pricing in a sub-three per cent cash rate by the middle of 2009, home loans rates should fall below five per cent, presenting the most attractive borrowing costs in recorded history. In fact home loan rates in Australia have not been less than six per cent since way back in 1970.”
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