Australia set for property setback as interest rates rise

Property prices in Australia could begin to fall as a result of a cut back in mortgage lending and rising interest rates, it has been suggested.

According to the country's largest real estate group, Ray White, turnover in the first quarter of 2010 has been slow in comparison to last year.

This is despite the country posting price rises of up to 20 per cent over the course of 2009.

Brian White, joint chairman of Ray White, explained that the poor results were continuing.

"Judging by our April results, it looks as if the interest rate increases are having an impact on activity," he said.

"With the additional interest rate hike, it would be the first time that the Australian market has not shrugged off the pattern of increases in the past."

However, earlier this year it was reported that the gap between supply and demand for property down under has risen by nearly 100 per cent over the course of the last 12 months.

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