Australian capital city prices are determined by incomes growth, claims an industry expert.
Andrew Wilson, writing in the Australian Property Observer, explained the nation’s house prices tend to follow the increase in incomes over the mid-to-long-term.
Figures show the typical household income needed to finance the average mortgage has remained proportionally the same for a number of years. This is further supported by the relatively low risk approach taken by mortgage lenders in the country.
Mr Wilson stressed regions looking to boost property prices will need to examine their current labour economics to help housing values increase.
“It is no coincidence that the capital cities with the lower relative unemployment rates have higher incomes and higher house price growth,” explained the real estate expert.
He added: “The capacity of local economies to generate jobs is therefore a key element in the outlook for house prices growth.”
The price of Australian property in the country's capital cities rose by close to ten per cent overall during 2013.
According to the RP Data-Rismark Home Value Index, the price of property in Australia’s capital cities rose by ten per cent, with Sydney showing the most growth with a 14.5 per cent rise in house prices compared to 2012.
Posted by Ravin Chatlani