 Prices rise in Sydney
House prices in Sydney are rising solidly this year despite other states experiencing falls. Sydney recorded the largest capital city gain of 1.1 per cent in May. The average price is now $582,543, according to an index published by RP Data and Rismark International yesterday.
Despite a global downturn, first home buyers have kept the market alive this year, largely due to the increased first home owner grant.
ANZ Bank economist Alex Joiner has spoken about trends in house prices as well in credit and is not worried about housing prices here in Australia falling as dramatically as in the US and Britain.
However, he also commented that when the first home owner grant is reduced later this year investors may head back to the market.
"The scaling back of the federal first-home buyers grant … will take some heat out of the housing market, yet we anticipate that investors and the 'upgrader' segments of the market will continue to pick up," Dr Joiner said.
In NSW house values rose 5.2 per cent in the first five months of 2009 and 3.5 per cent over the year to May.
Looking at other capitals, Melbourne was up (6.1 per cent) and Darwin (5.5 per cent).
However, yesterday the Housing Industry Association says new home sales in NSW fell 10 per cent in May, and believes the amount of building in the state would hit a record low in the 2008-09 financial year.
The trends have convinced some economists that house prices have bottomed, but questions remain over the sustainability of relying on first-home buyers to prop up the market.
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