17 July 2009
Australia’s economy has so far managed to avoid “catching the recession bug” that has plagued so many other countries around the world thanks to the strong Australia property market, according to Besa Deda, a chief economist at St.George Bank.
Writing on ninemsm’s money section, Deda said: “Economic conditions in Australia have weakened but not yet enough to satisfy the technical definition of a recession. One of the reasons the Aussie economy has experienced a downturn that has been softer than many other developed economies is the resilience of its residential housing market.”
The chief economist believes that Australia’s housing market is well on the way to recovery, thanks largely to significant cuts to interest rates and the government’s first-home buyers’ grant.
Deda points to the fact that both the value and number of loans to owner-occupiers has risen for eighth straight months. The annual rates of growth stand at a seven-year high of 36.3% and a nine-year high of 23.5%, respectively.
“Encouragingly, the recovery in lending is beginning to broaden. The recovery was initially driven by first-home buyers and by households taking out a loan as an owner-occupier,” Deda added.
She continued: “We expect housing lending to continue to gain strength. It should in time lead to a recovery in residential construction, most likely in 2009/10, and eventually also lead to a lift in house prices.”
See Also: Marc Da-Silva (269), Overseas property investment news (34), St George Bank (1), Besa Deda (1), Mortgage (25)
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