The key players in the Australian property market are very unhappy with the banks' decision to raise interest rates. The investors and owner-occupiers who are affected by higher interest rates are not concerned that the Australian property might crash anytime soon. The signs are alarming and as interest rates negatively impact market confidence, the November announcement of the reserve bank's decision to maintain official interest rates at 2.0 per cent for the sixth consecutive month was a hard blow on buyer's sentiment.
According to Yahoo Finance, 70 per cent of Australian are now convinced that the property market is going into a bubble, or already in it. The market analysts believe otherwise but it might be hard for them to convince everybody that the property market is not going to crash.
Director of Metropole Property Strategists, Michael Yardney, are one of those who believe that the market is not collapsing. He says robust population growth, a healthy economy, a sound banking system, rising business and consumer confidence and a healthy level of household debt all point to a stable market condition. Yahoo Finance quotes what he said, "While immigration levels have dropped, we're still growing at a faster rate than any other country in the developed world.
He continued, "A healthy economy that, while slowing a little, will continue to perform at a level that is envied by much of the Western world and will create jobs for anyone who wants one."
Australia's vigorous real estate market can be attributed to the 70 per cent of home ownership being paid off by owner-occupiers.
And with this Clive Warren, associate professor, property & project management at University of Queensland also believes that the market is not in a bubble. Even if there is what seems to be volatility, growth in areas like Sydney and Melbourne, show that the property market is not going to crash. According to Yahoo Finance, Warrant said, "Even in Sydney and Melbourne where the growth has been, we might see some of the very top prices paid easing a bit but general if anything we will see a catch up period where there is little price movement."