Country Research » Australia

Economic Insight

• The Australian economy recovered relatively quickly from what was a shallow downturn following the global financial crisis; GDP in 2010 was 2.7%
• Inflation is forecasted to remain at 3% throughout 2011
• The Reserve Bank of Australia raised the interest rate to 4.75% in April 2011
• It is widely expected that the Reserve Bank of Australia may resume lifting in interest rates in 2011 to counter inflation, fueled by the biggest surge in demand since 2009

Property Market

The Australian property market in 2010 was one of the world’s frontrunners, high demand supported by low unemployment and a lack of supply fueled the rising property prices.  However in Q1 2011, Australian residential prices have declined.  Borrowing costs increased several times between October 2009 to November 2010, and they have eventually had an effect on the residential market.  The flooding and cyclone damage in Queensland also had a major impact on values over the last quarter, in Q1 2011 the weighted average prices for existing houses in eight major cities dropped by 1.7% compared to Q4 2010.  Melbourne and Brisbane experience the biggest price drops, both seeing a decline of 2.5% from the previous quarter.