CANBERRA: Fitch Ratings is forecasting 4 per cent growth in Australian residential property prices this year, down from around 7 per cent in 2014. In its 2015 Global Housing and Mortgage Outlook report, Fitch finds that Australian homes are the third most expensive of the 22 countries it looks at on the level of prices compared with rents and also compared with incomes.
Australian property remains among the most expensive on almost all metrics, noted the report. With almost 25 years of continuous GDP growth, record low rates and stable unemployment, Fitch expects Australian prices to remain high and affordability likely to slightly worsen in the near term before levelling off as it reaches an affordability ceiling.
“Fitch notes that Australia has had the strongest price growth of any of the nations it looks at over the period since 1997, at nearly 390 per cent.Despite this, Fitch’s forecast of 4 per cent growth this year would put the Australian market third for 2015 increases behind South Africa and Brazil, both countries with much higher rates of general consumer price inflation.
