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House prices 'depend on unemployment staying low'

Unemployment in Australia needs to remain low to allow the price of property in the country to grow or at least remain stable, an economist has claimed.

The increase in the price of property in Australia depends on the country's unemployment rate staying low, a leading economist has claimed.

Alan Oster, National Australia Bank's global chief economist, told the Australian newspaper that the unemployment rate would have to rise to between eight per cent and 8.5 per cent for a collapse in house prices to occur.

The unemployment rate in Australia in October was recorded as 5.4 per cent.

If unemployment increased to eight or 8.5 per cent then house prices could drop by 20 to 30 per cent, Mr Oster claimed.

He went on to say that one of the biggest problems associated with the housing marked is debt, as "Australians love their housing and they will borrow to buy a home".

A report from the Australian Bureau of Statistics published last month revealed that, in trend terms, 11,339,400 people were in employment in the country in October.

Posted by Ravin Chatlani

- unemployment, housing, prices, jobs

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