Australia Property Holdings hit all-time high

The Australian property market seems to be on a never ending upward spiral. Data compiled by the Australian Bureau of Statistics and Federal Treasury shows that private holdings of property increased by 2.4% to a record high of AUS $5.77 trillion.

This is just an incredible figure and represents an average property holding of $259,500 for each Australian. Considering that so many Australians rent their home, there must be some who own significant numbers of investment homes.

The Australian economy was hardly affected by the global financial crises and did not enter into an official recession. Unemployment did increase slightly but is now already recovering. Indeed with the economy and wealth bouncing back, the Reserve Bank of Australia has already started raising official interest rates. It is expected that another 0.25% increase will come in August 2010. The Reserve Bank will be watching inflation data carefully to see any early signs of overheating.

The underlying trend for private housing prices in Australia has continuously been upward and this trend is unlikely to change. However investors should factor in increased interest rates into their cash flow calculations when considering making further investments in housing.