Australian House Prices

With the average city house price now sitting at around a half a million dollars where are Australian house prices headed in the short to medium term?

All states across Australia have seemingly weathered the storm of financial devastation that has swept much of the rest of the world including America and Europe. So why is it that our property prices have held up so well and even risen in many areas (particularly in Melbourne and Sydney) over the last few years? Sure there has been some losses particularly in the above $1 million dollar price range, but this has more been a direct result of business failures and over extended finance commitments during the times when banks were throwing money at any property deal in the past.

However middle range well located properties have held up very well. I have always said that you are better off investing in 2 or 3 middle of the road older properties than 1 expensive executive residence for he following reasons:

• When times are tough average people still require average quality, well located properties
• and the rents on such properties more often pay a larger proportion of outgoings (i.e loan repayments and rates bills)

So where are Australian house prices headed?

I believe that in the short term investors will get the best returns from well located properties that are in cities which are seemingly undervalued and more affordable, but with strong growth prospects through employment and planned infrastructure improvements. For these reasons South Australia and Queensland are my two predictions for the largest percentage gains over the coming year.

I also believe that any houses, especially those on large blocks near hospitals across Australia will do exceptionally well over the next 5 years as local councils rezone these well located properties to allow for buildings suited towards aged care.

Australia has many fundamentals to support future sustained growth across the board in years to come and I believe that we will see average Australian house  prices in the vicinity of 1 million dollars by 2015.