Newspaper article The Northern Star (Lismore, Australia)

Housing Market to Fare Better Than Other Countries

Newspaper article The Northern Star (Lismore, Australia)

Housing Market to Fare Better Than Other Countries

Article excerpt

While Australia looks increasingly unlikely to avoid a recession in 2009, our housing market will fare much better than other countries, the International Monetary Fund (IMF) says.

One of the world's largest credit insurers, the French insurer Coface, agrees, adding that it believes Australia could be one of the first economies to resume solid growth when the international recession ends, which it predicts will be the end of this year.

The five developed countries that have been most violently hit by the financial crunch - the USA, Spain, Britain, Ireland and Iceland - were left vulnerable by real estate bubbles and high levels of consumer debt, Coface says. "But we think there is no housing bubble in Australia," said Christine Altuzarra, an advanced economies analyst for Coface.

Australia and France were the two developed countries where it had been most difficult to decide whether there were property bubbles. Ultimately, Coface's analysts were swayed by the fact that property prices did not rise nearly as sharply in Australia - from 2000 to 2007 - as in nations such as Britain and Spain.

For that reason, the firm doesn't expect property prices to fall as dramatically as in those countries.

However, The Australian reports that leading economic forecaster Access Economics has warned "with a budget that's buggered", Australia faces "not just a recession. This is the sharpest deceleration Australia's economy has ever seen."

This notion was challenged by Coface who state there is still home construction activity in Australia and "consumer debt levels are not out of control, you have not had sub-prime lending and your banks have been very cautious in making loans", Ms Altuzarra said.

"We do not see Australia in recession in 2009 at all and your levels of debt are not very high."

Ray Brooks, the IMF's Asia and Pacific Department's division chief, says "Australia is not suffering from the same magnitude of inflated house prices as are evident in the USA and Europe. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.