Out today, the monthly RP Data-Rismark International, national  Home Value Index confirmed that home values in Australia continued to trend upwards. In Sydney average values were up 5.2%.  Melbourne enjoyed the largest rebound, with average prices up 6.1%.

In terms of property types, units continue to outperform houses. Over the first five months of 2009 unit values increased by 4.5% while house values rose by 3.7%.

RP Data head of research Tim Lawless said, “These latest results herald a national residential market recovery.”

Rismark's managing director Christopher Joye said the recovery has proved key to economic confidence so far this year.

Craig James, chief economist at CommSec, said Australia could rightly claim the title of 'wonder from Down Under' as prices continue to rise.

"It is a simple case of supply and demand," he said. "Demand for homes is being spurred by improved affordability, the fastest population growth in 40 years and weak returns on other assets."  The climb in prices should boost activity in the market, Mr James told ninemsn, helping to push prices between 5 and 8 %  higher from now until the end of the year.

Alex Joiner, an economist at ANZ, also expects to see "modest growth" in property prices this year.

"These results put beyond doubt the fact that the local property market is not headed for the Armageddon scenario foreshadowed by some and that we will not see house prices fall to the precipitous extent that has been seen in many other advanced economies,"

Dr Joiner added  "The recovery in Australia’s housing market, which has defied countless doomsayers, has in turn been the cornerstone of the Australian economy's stability in 2009," he said.

At the same time, the supply of new housing is stalling.

Mr Lawless  stated that Investors are becoming increasingly attracted to the strong rental yields that are creating positive cash flow opportunities within key markets around Australia.” 

The RBA, which subscribes to the RP Data-Rismark Index data, confirmed its findings in their June Board Minutes,

The Australian Bureau of Statistics housing finance data in April also showed the first signs of a rebound in investor participation.

Sources – ninemsn Money, smh,

House prices will defy the economic gloom to edge higher this year, thanks to confidence in the market "returning in spades," ANZ said today.

While the global recession has wiped 20 percent or more off the value of average house prices around the world, Australian property prices have softened by just 1.2 percent in the year to the end of May. The average house across Australia is worth $395,000, according to Residex research used by ANZ.

ANZ said record affordability, a chronic imbalance between supply and demand, and ongoing population growth will support the market.

"The Australian economy has proven to be remarkably resilient to the recessionary conditions currently gripping much of the globe – so has the Australian housing market," ANZ economists said in the bank's monthly housing report.

"Prices momentum has clearly improved on the back of significant interest rate cuts and government assistance to first time buyers."

Since the Reserve Bank of Australia began cutting interest rates last September, mortgage approvals have soared 20 percent. First time buyer incentives have also helped kick-start the market, with record numbers of new buyers climbing on the property ladder. First time buyers currently account for 38 percent of all buyers.

Meanwhile, population growth continues to run at its highest level in 40 years, supporting an "unprecedented" call for housing which will push prices higher, ANZ said.

"[Property] prices, especially where first homebuyers are most active at entry to median levels, have started to edge upwards," the bank reported.

Sydney, Melbourne, South Australia, Tasmania and Australian Capital Territory, are all enjoying positive signs of price rises.

However, ANZ warned that the top ends of these markets will be the last to recover, as prices remain soft. Plus, property in the mining states has not clocked the recent gains of fellow states.

Although economic uncertainties remain, with the job market providing a "cloud over the horizon," ANZ said house prices should enjoy modest growth during 2009.

"We expect prices to edge higher for much of the remainder of 2009," the bank concluded.

Source:  Ninemsn 25 June 2009

By Emma Thelwell, ninemsn Money

Australia will exit the economic downturn ahead of most other countries and the rise in unemployment will not be as severe as previously thought, according to the Organisation for Economic Cooperation and Development.

The OECD is less pessimistic about the outlook for the Australian unemployment rate than the federal government, but warns future economic conditions are "wrought with uncertainty".

In its latest economic outlook, the OECD expects Australian economic growth to contract in 2009, leaving scope for the Reserve Bank of Australia (RBA) to cut the official interest rate further.

"The international crisis has not spared Australia, even if its impact will be less severe that the OECD average," the Paris-based institution said on Wednesday.

"To mitigate the impact of the crisis, authorities need to maintain the expansionary thrust of their economic policy. Monetary policy could be loosened further," it said.

The OECD is forecasting economic growth to contract by 0.4 per cent in 2009, before rebounding modestly in 2010 by 1.2 per cent.

In contrast, gross domestic product (GDP) across all OECD countries is expected to slump by 4.1 per cent in 2009 and then grow by a slender 0.7 per cent in 2010.

But it said OECD activity now looks to be approaching its "nadir", following its deepest decline since World War II.

"The ensuing recovery is likely to be both weak and fragile for sometime. And the negative economic and social consequences of the crisis will be long lasting," it said.

It expects the Australian jobless rate to be 6.2 per cent rate in 2009, rising to 7.7 per cent in 2010.

This is much lower than the average 9.9 per cent it is forecasting across OECD countries at the end of 2010, which would see 57 million people out of work, up from 37.2 million at the end of 2008.

In the May budget, the Australian government forecast an unemployment rate of 8.25 per cent by mid 2010, rising to 8.5 per cent 12 months later. It was 5.7 per cent in May.

The OECD said the Australian economy has benefited from a weaker Australian dollar in the early part of the year, robust exports to China and a boost to household demand from government stimulus.

This has helped to more than offset a "pronounced weakening" in business investment.

GDP unexpectedly grew 0.4 per cent in the March quarter, avoiding the second quarter of contraction that defines a recession.

"However, despite these relatively favourable developments, economic conditions remain fragile, and GDP is likely to show renewed weakness in the second (June) quarter," the OECD said.

It said the business climate continues to be depressed, even though confidence indicators picked up slightly from a very low level at the start of the June quarter.

It said profits were down and investment plans had been cut back, while the slowdown in credit growth had continued.

It welcomed the federal government's infrastructure development program announced in the May budget.

"To enhance future growth potential, the reform of infrastructure regulations should continue, in particular to ensure regulatory streamlining between states," it said.

The deterioration in the external environment, including the impact of falling commodity prices on the terms of trade and its adverse effects on wealth and confidence, are expected to dampen growth in 2009 and 2010.

But it said the stabilisation of international financial markets, measures to support activity and the progressive improvement of the external environment should contribute to a gradual recovery in growth from late 2009.

"However, this outlook is wrought with uncertainty," the OECD warned.

"A more adverse external situation cannot be ruled out and financial disorder may last longer than expected. But a faster, more sustainable upturn in the Chinese economy would also spur a stronger recovery in Australia."

Source:   ninemsn 25 June 2009

Consumer confidence across the nation has bounced back with record pace, as Australians brush off gloomy economic forecasts.  According to latest research, consumer confidence soared to a 15-month high between March and May, rising a record 18 percent over the period. The swell of confidence – with six in ten Australians optimistic about their financial future – comes despite warnings that a recession could hit later this year.

Prime Minister Kevin Rudd, along with a slew of economic experts, has warned that a recession is inevitable regardless of recent upbeat economic data. The national accounts figures showed earlier this month that Australia has avoided a technical recession – typically defined as two negative quarters of economic growth.

However, the majority of Australians are riding out the economic storm with an increasingly rosy outlook, said Christena Singh, author of the report from Sensis.

“It is interesting to note that while Australians are increasingly optimistic about their financial prospects, they believe the Australian economy is contracting,” she said.

Two-thirds of Australians accept that the economy is currently slowing, according to the survey of 1500 people.

However, Ms Singh said most people have escaped any major impact from the downturn.

 “Less than four in ten said they had been personally impacted by the current economic situation, while more than six in 10 Australians said they had not been impacted”, Ms Singh said.

Australia’s current health system was the largest cause of concern, the survey found, with the cost of living and the state of the economy taking the second and third spots.

Unemployment – a key driver of consumer confidence – trailed behind as the fifth biggest concern. Meanwhile, worries over the standards and quality of our political leaders has risen sharply from a flat 0.05 percent to 6.5 percent in just three months.

Source: ninemsn  25 June 2009

By Emma Thelwell, ninemsn Money

There are predictions Australia will surge out of the financial downturn as early as next year, with the government attributing the news to its stimulus payments.  In its latest economic outlook, the Organisation for Economic Cooperation and Development (OECD) expects Australian economic growth to contract by just 0.3 per cent this year and will grow by 2.4 per cent in 2010.

The report, although more optimistic than expected, still leaves scope for the Reserve Bank of Australia (RBA) to make further cuts to the official interest rate. "The international crisis has not spared Australia, even if its impact will be less severe that the OECD average," the Paris-based institution said on Wednesday.

"To mitigate the impact of the crisis, authorities need to maintain the expansionary thrust of their economic policy. Monetary policy could be loosened further," it said.

In contrast, gross domestic product (GDP) across all OECD countries is expected to slump by 4.1 per cent in 2009 and then grow by a slender 0.7 per cent in 2010.

But it said OECD activity now looks to be bottoming out, following its deepest decline since World War II.

"The ensuing recovery is likely to be both weak and fragile for sometime. And the negative economic and social consequences of the crisis will be long lasting," it said.

It expects the Australian jobless rate to be 6.2 per cent rate in 2009, rising to 7.7 per cent in 2010.

This is much lower than the average 9.9 per cent it is forecasting across OECD countries at the end of 2010, which would see 57 million people out of work, up from 37.2 million at the end of 2008.

The report is a clear endorsement of the Government's economic policy, Federal Treasurer Wayne Swan says.

"We can now see the evidence that it's working to support jobs and growth."

"I think all key international economic institutions agree the government is doing all it can to cushion Australians from the worst of what the world can throw at us."

Source: Macquarie National News

25 June 2009