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Brendan Wong
With the US property market now in recovery, Australia can expect a similar occurrence according to RE/MAX managing director Geoff Baldwin.
"For decades, the Australian economy has closely mirrored that of the USA and although we navigated the recent global financial crisis better than most, we were almost immediately affected by the US downturn in 2007,” he said.
"The good news is that the $17 trillion dollar US housing market is rebounding strongly, with confidence returning, forced sales reducing, sales volumes up significantly and new house starts at a five-year high.”
RE/MAX USA had recorded values in the United States rising by 5.1 per cent across the board over the past 12 months, with many markets up by 13 to 20 per cent.
“This demonstrates that the historic real estate cycle is as reliable as ever, and the same applies here in Australia,” said Mr Baldwin.
"Confidence returning to the US market bodes well for our own real estate environment remaining in positive territory, and activity in most states is expected to show continual improvement through winter, increasing with the onset of the warmer months.”
However, senior economist for Australian Property Monitors Dr Andrew Wilson told Real Estate Business that there was no relationship between the US and Australian economies, which were the drivers in the housing market.
“Certainly US house prices have started to grow again, and it’s no surprise that unemployment has been trending downwards in the United States and we are starting to see prices grow as a consequence," he said.
“However, the underlying dynamics of the market are different and our prices growth has already occurred because our economy wasn’t as linked with what happens to the United States as it used to be. But certainly, it’s in tune with what happens in China and of course, we had some internal stimulus to our housing market ... and a number of other factors that were external to what happened in the United States.
“The growing US economy means growing house prices in America, which means a growing Australian economy. Typically, that means growing house prices in Australia. But individual markets are travelling at different speeds as this happens - some are playing catch up, some are a bit ahead of the mark.”
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