Sydney property holds up

Those thinking of investing in property in Sydney will find that Australia's largest city has been spared the slump in house prices that have occurred in major world cities elsewhere.

Director of economic and market analysis at Citigroup Shane Lee told the Sydney Morning Herald the next couple of years will see house prices in the city increase, unlike in come other major metroplitan centres around the world.

The good news for buyers of Australian property is that Mr Lee does not believe it will be the top end where properties are due to rise most in value.

He stated: "The lower end of the Sydney property market is likely to outperform the top and middle ends of the market over the next few quarters."

Next year will see a two per cent price rise across the city and 2010 will bring a seven per cent increase, he predicted.

Australia's property market may be in for a significant boost following this week's decision by the Reserve Bank to cut interest rates by one per cent.

Bank governor Glen Stevens said the prospect for lower inflation in 2009 made the move the right one.