Categorized | International

Consumer Confidence Falling in Australia

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The real estate market in Australia is expected to continue it’s downward slide, as consumer confidence in the nation continues to drop at unprecedented levels. With the European debt crisis looming, and there are fears worldwide of another global recession taking place, Australians are opting to hold off on buying properties.

The majority of Australians believe that housing prices will continue to decline in the next quarter, and even throughout the next year. The biggest declines in property values are expected in the nation’s largest cities. In order to prevent any serious declines, banks have cut lending rates significantly.

Even with the cuts, many believe that the market will continue to struggle. The United States has experienced a similar market situation, in that despite record-low mortgage loan rates, the housing market has yet to see an end to its steady decline.

Aside from the global economic crisis factors, one of the primary reasons as to why the Australian property market has struggled is that many first-time homebuyers have opted not to enter the market in recent times. First-time homebuyers remain down from previous years. The government and banks are working together in establishing incentives to attract more first-time homebuyers. There is hope that lower interest rates will have a positive impact.

Without a sufficient number of first-time homebuyers in the market, there is not enough demand for other homeowners to consider selling their home in order to move into a new one. As such, the market as a whole declines, as buying and selling activity remains down from desired levels.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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