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There's no doubt - 2014 was a stellar year for the Australian property market

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Last year ended on a high note for the Australian housing market, confirms the Real Estate Institute of Australia (REIA) in its latest quarterly report.

According to REIA CEO Amanda Lynch December was the strongest month.

She said home owners should be pleased with these results, as it shows a rise in the value of their properties. It should come as even better news for those wanting to sell.

The report states that the average price for Australia's eight state capitals is $641,457.

Sydney house prices are the highest, averaging at $881,971. Hobart has the lowest house prices at $360,000.

Ms Lynch says this discrepancy points to a key issue. The difference of over a half a million dollars between the two cities shows that growth in prices is not steady across Australia. Hobart prices are 43.9 per cent lower than the national average.

The Australia Prudential Regulatory Authority (APRA) introduced restrictions on investment lending last year. This was to curb the property boom and balance the market.

However, a press release by REIA suggests that efforts to add stability to the market could backfire because of the large inconsistencies in house prices across the country.

The report also indicates that the price rise has come with a drop in housing affordability. This is great news for those wanting to rent, however, it means Australians planning to grow their investment portfolio this year will need to devise a good property development plan to succeed.

Ms Lynch said housing affordability has declined across Australia because the strong rise in property prices is not being matched by increases in the average Australian income. This means a larger chunk of the home owner's salary is going to be spent on mortgage payments compared to last year.

Date Published: 18 Mar 2015
Category: General News

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