Property owners will continue to see the value of their homes grow in the new year, with house prices across the nation already exceeding pre-global financial crisis levels.

The markets of Sydney and Melbourne have led the recovery, with Melbourne alone recording a 12.5 per cent rise, in since March, Australian Property Monitors (APM) says.

“Property owners will continue to see their investment grow in the new year, with house prices already exceeding pre-global financial crisis levels nationally by nearly three per cent, and growth is expected to continue well into 2010,” APM said in a statement on Friday.

The phasing out of the first home owner’s grant boost had barely impacted the lower end of the housing market in the last quarter of 2009.

Furthermore, rising interest rates were not expected to affect prices until late 2010 or possibly 2011.
Full Story

Interest rates should now stay on hold for some time after the latest increase by the Reserve Bank of Australia (RBA) on Tuesday, a mortgage broker says.

The RBA raised the cash rate by 25 basis point to 3.5 per cent following Tuesday’s board meeting, following a similar increase last month.

Loan Market Group executive chairman Sam White said the RBA has responded to Australia’s strong economic performance.

“By getting in early they are solving any possible inflation pressures,” Mr White said in a statement.

“It means we’re going to have fewer rate rises in the future and this rise hopefully should be the last for some time to come.”
Full Story