Australian mortgage holders in some parts of the country might have become a little nervous this week, with new statistics out showing that the value of Australian houses and units has dropped in some cities – in particular, in Brisbane (by 3.3 per cent) and Perth (by 2.5 per cent) for houses, and in Canberra (by 2.7 per cent) and Perth (by 2.5 per cent) for units, over the three months to the end of July, according to the RP Data-Rismark International quarterly index. In other cities, home owners and investors won’t be so concerned, as there have been slight rises; and in all cases, the overall trend for the past year is still an increase.
But what does all this mean for the future? After all, our future house price – at the time we decide to sell it, or use it for capital for investments – is the one that really counts, not the value placed on it today. The experts are saying that if interest rates remain stable, then it is possible that the value of Australian houses might rise some more during the rest of the year; if interest rates are increased, then they are more likely to remain stable.
On the whole, when compared to the global economy, Australian house prices have survived the global financial crisis very well. Most sources are reporting a “soft landing” from potential disaster although a Morgan Stanley report is a bit more pessimistic, saying that “Dodging the worst of the global financial crisis didn’t demonstrate that there’s no bubble” – in other words, they think our house prices could still crash, leaving some of our mortgages dangerously high. Let’s hope they’re wrong!