More talk of Australia’s property Armageddon has reared its ugly head in the media recently, with the results of a global house price index revealing, well, pretty much what we already knew anyway; our house prices are sliding.
If this fall in our world rankings something to worry about?
The results of the Knight Frank house price index published in the Herald Sun list Australia as 28th in the world after falling 15 places, with our house prices dropping by 0.2 per cent for the year to March 2011 and 1.7 per cent for the quarter.
The 27 nations who ranked ahead of us, including Poland, Latvia, Finland, Indonesia and India, experienced increases in property prices, while our property prices are sliding. The UK came in at number 29 and the US placed 43rd.
However Australia is not alone in its real estate slowdown, with global house prices increasing by just 1.8 per cent in the year to March, representing the lowest annual rate of growth since the end of 2009.
Additionally, half of the 50 countries that were listed experienced flat or declining values, compared with only 18 for the previous year.
Knight Frank’s residential research head Liam Bailey believes we are yet to see the bottom of the market and suggests prices will likely hit their lowest point at the end of the year.
“In summary, we expect to see the current slowdown in global housing markets to continue,” he said.
This ranking is an interesting outcome for Australia’s property market on the global stage, considering not too long ago we topped the list as the least affordable country in the world.
But I’m not concerned and I really don’t think we need to hit the panic button yet. The reality is that we are experiencing a very healthy pause given the substantial capital gains we’ve enjoyed in the past. Our property markets are behaving normally – after a boom period we have a slump period – that’s the way the market works.
And for investors, the current climate spells one thing – opportunity. So I, for one, am not complaining!
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