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Australia house prices ‘to slow’

14 July 2015 by News Desk

property_prefabProperty prices in Australia will not collapse in a bubble and house price inflation will only slow down when interest rates go up.

That’s the view of investment bank UBS, who believe that property prices are probably heading for a correction in the next 2 to 3 years, but there is no sign yet of any impending cause for concern.

UBS senior economist George Tharenou said a rate increase by the RBA will be the key to any price correction and points out that previous property price growth fell when interest rates increased in 2003, 2007 and 2010.

“The key driver for house prices to slowdown is RBA rate hikes; not excess supply or unemployment,” he said.

UBS predicts national investment in housing will grow by 10% into 2016, prompted by record low home borrowing interest rates.

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