Australias Resilient Market

Despite renewed doom and gloom predictions of house prices crashing, Australia's property market remains resilient.

Figures released this week for the September 2005 quarter show that established house prices across the eight capital cities fell by a very mild 1 per cent over the quarter, and remained 1 per cent higher than 12 months earlier.

For new homes (minus land), prices edged up 0.8 per cent over the quarter to be 5.3 per cent higher than a year earlier.

Building industry body, HIA, said this week that not only do the updated figures firmly contradict predictions of a house price crash, but they provide further confirmation that even after a record period of building and renovating, demand for housing remains solid.

"Interest rates are low, as are unemployment rates, rental markets are tight, and overseas migration is historically high. These factors are keeping a floor under house prices", said HIA's Senior Economist Harley Dale this week.

"There has been nothing to trigger a substantial fall in house prices since the market peaked. More importantly, in the absence of significant interest rate rises which would lead to a marked deterioration in labour market conditions, one has to question where the trigger for such a correction would come from going forward", he added

.