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Date Published : Tuesday, April 08, 2008
Rising interest rates, tighter home loan conditions and the affects of the global credit crunch mean that many of Australia's most affluent neighbourhoods are feeling the pinch when it comes to the property market, according to a new report.
A study by RP Data found that house prices in affluent suburbs of many capital cities are starting to fall at rates similar to those in other areas.
The data shows that house prices in Melbourne's Boroondara area - encompassing the suburbs of Kew, Camberwell and Hawthorn - fell by 2.7 per cent, whilst Sydney's inner west suffered a 1.2 per cent drop, news.com.au reports.
Glenelg, in south Adelaide, saw a three per cent drop in prices.
One of the reasons for the reduction in prices is put down to the high interest rates - which currently stand at 7.25 per cent - and mortgage lenders tightening up affordability to all consumers, including the most affluent.
Tim Lawless, of RP Data, told the news provider: "As more owners place their luxury homes on the market and with fewer buyers, we may see cracks spread further through the inner city and coastal markets.
"With the number of margin calls expected to increase as the year progresses, further pressure will be placed on these markets."
Recently, the Reserve Bank of Australia claimed that houses would "never" be affordable to the vast majority of Australians, with even the affluent struggling to afford properties and home loans in some regions of the country.
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