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REIQ Journal : July 2008
Affordability takes centre stage By Dan Molloy, Managing Director, REIQ The Australian economy has gone from strength to strength in recent years and a robust residential property market in Queensland has seen existing home owners reap the benefits of rising values and increased equity. BUT THE RESERVE Bank of Australia has implemented a tighter monetary policy since late 2007 in an effort to keep inflation in check and there’s no doubt that many homeowners, renters, and potential buyers are struggling. The sub-prime crisis in the US, a jittery share market and continued high consumer spending earlier this year – together with a number of interest rate rises since last August – have had a significant impact on the hip pocket of consumers and the residential property market specifically. Rising rents, higher loan repayments and surging house prices have also locked increasing numbers of aspiring first home buyers out of the market. In early June, the Queensland State Budget was unveiled revealing a range of new initiatives that seek to arrest declining affordability. These, in conjunction with indications from the Reserve that domestic spending is finally slowing, could provide a much-needed boost for aspiring first home buyers and others who are currently delaying property purchase decisions as they await economic stability. REIQ Journal July 2008