Australian property market set for "continued health"

The Australian property market may struggle to maintain its momentum in the closing stages of 2009, but its long-term prospects are good, according to a mortgage expert.

Both the volume of sales and property values have risen in recent months, with the Australian Bureau of Statistics' Eight Capital Cities Index climbing by 4.2 per cent in the second quarter.

Much of the recent sales activity has been caused by new buyers trying to take advantage of the increased first homeowner grant, which is only available until the end of September.

John Symond of Aussie Home Loans told the Daily Telegraph prices were being supported by the trend, as first-time buyers keen not to miss out on the government money are prepared to pay more than properties are actually worth.

Australian property experts are not certain what impact the change to the first homeowner grant will have and some have suggested the true condition of the market will not become clear until the final quarter of the year.

Mr Symond said the situation could be complicated by future interest rate rises, but added: "It is clear that the Australian economy is showing a robustness that is surprising, and that will probably drive continued health in the property market."

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