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Australia sees home price growth fall in 2015: report

Xinhua, January 15, 2015 Adjust font size:

Growth in Australian house prices will fall in 2015, according to the latest forecasts of a global rating agency announced on Thursday.

House price increases are estimated to rise by 4 percent this year, down from 7 percent in 2014, a new report from Fitch Ratings said.

Australian house prices are now settling after rising 15 percent in the past 18 months.

In Sydney and Melbourne, the nation's biggest markets, the market is expected to slow by 3 percent to 4 percent.

According to the report, increased property investor activity is impacting on first-home buyers, who are unable to purchase property and continue to rent.

Home ownership levels had fallen from 70.7 percent in 2000 to 67.5 percent in 2012, the report said, with official figures showing first-home buyer numbers hit record low in 2014.

"The growth of the housing investor market has largely been at the expense of the first-time buyer," the report said.

"There is little doubt that first-home buyers are being priced out of the market."

Fitch expects investor demand to remain high in Sydney and Melbourne, so long as interest rates remain at the current low level and so long as the tax incentives to invest in property remain. Endi