House prices resilient
- surveyBy Nicki Bourlioufas
April 17, 2007 12:28pm
AUSTRALIANS are largely confident that their properties have retained their value over the past year despite rising interest rates and the proportion of people believe their house has lost value has diminished, a survey has revealed.
A survey by NEWS.com.au and Coredata conducted from March 22 to 29 has found almost two in three Australians, or 60 per cent, thought the value of their home had been maintained over the past 12 months.
Just 27 per cent of respondents thought their property had fallen in value, down from 34 per cent in a December survey.
But of those who had seen the value of their property decline, 28 per cent said they held 'negative equity', or that their mortgage was worth more than their home.
That equated to 9 per cent of all borrowers surveyed.
Of those who said their home's value had fallen, 55 per cent said it had reduced their financial security.
Rates on the rise
The central bank raised interest rates three times last year, which kept home prices down in 2006.
Some analysts are forecasting the Reserve Bank of Australia will again raise rates in May.
As interest rates rise, bank repossessions of properties are rising around Australia, particularly in the outer suburban areas of Sydney and Melbourne, as some people fall behind on mortgage repayments.
People who bought at the peak of the property boom in 2003 are also suffering with higher interest rates.
Some real estate analysts expect repossessions to rise over coming months as the rate rises of late last year feed through the financial system and property markets.
House prices gain
According to data from the Australian Bureau of Statistics, house prices across the nation rose 8.3 per cent over the 12 months to December 2006.
House prices rose in all cities, except Sydney, where they fell a modest 0.1 per cent.
Annually, house prices rose in Perth (up 36.9 per cent), Darwin (up 17.6 per cent), Canberra (up 9.2 per cent), Melbourne (up 8.1 per cent), Brisbane (up 7.1 per cent), Hobart (up 7.1 per cent) and Adelaide (up 6.4 per cent), and fell slightly in Sydney.
Most analysts are tipping modest growth in house prices over the year to come, with higher interest rates capping capital gains in all cities. |