LONDON — A surge in stock market interest in Australia’s housing market has lifted the outlook for home ownership and helped boost the Australian dollar, according to a new report.
The National Institute of Family, Housing and Community Studies said on Monday that demand for new homes has also been boosted by a surge in interest in Australian property, particularly in Sydney, Melbourne and Brisbane.
It also said demand for housing investment in Australia has been increasing and that a record number of Australian households are being put in homes.
“Overall, the Australian economy continues to expand at a healthy pace and housing is seen as a key driver of this growth,” the report said.
“With more people in employment and the national economy growing, housing is now a key element of this economic expansion.”
“The Australian economy is benefiting from a strong housing market, as more households are getting out of the house and looking to buy a home,” it added.
“Australia’s population is growing at a rate that is twice the global average and the average Australian household is currently living in a lower income bracket than the global median.”
The institute’s report also said the rise in interest rates and a slowdown in the Australian construction sector have created an upward pressure on the Australian property market.
“There has been a marked increase in home prices in recent months, particularly over the past six months,” it said.
“This is likely to be driven by strong demand for existing homes, as well as the recent supply disruptions associated with the housing crisis.”
“Demand for new properties has been strong, especially over the summer months, with new houses selling for as much as 25 per cent more than the average sale price in March and August,” it continued.
“However, as house prices are now in a period of supply constraint, we expect this to gradually reduce.”
The housing sector is “a key driver” of the national economic recovery, the report added.
The housing market is the biggest driver of employment growth in Australia and a key component of the economy, according the report.
“Demand in Australia is likely also to continue to be a key contributor to economic growth,” it concluded.
“The housing boom is likely partly to be supported by the strong economic recovery and the recent tightening of lending conditions.”
“A weaker construction sector, and the higher cost of construction will lead to higher household debt levels and slower growth in demand for dwellings,” the institute said.
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