Australia’s housing market was one of the world’s strongest in 2010, but expected interest rate hikes may ease growth, according to the Global Real Estate Trends report released by Canada’s Scotiabank.
The report tracked the housing markets in 12 advanced economies in 2010.
While home prices rose in the UK, Switzerland, Sweden, France, Canada and Australia, they remained flat in the US and Germany, and dropped in Spain, Japan, Italy and Ireland.
The growth in the Australian housing market was attributed to tight housing supply and relatively low unemployment.
However, interest rate rises and a reduction to the first homeowners grant slowed the red-hot real estate market this year to some extent.
Economist Adrienne Warren said the Reserve Bank of Australia will likely raise interest rates by another 75 basis points next year.
The country’s resource wealth and close trade ties with Asia would continue to support its strong domestic activity.
“Higher interest rates will worsen an already strained affordability,” said Ms. Warren.
Meanwhile, the UK real estate market experienced a strong early-year recovery, while the decade-long housing slump in Germany also ended.
Italy, Ireland and Spain all saw a decline in their respective housing markets, while Japan’s two-decade-long real estate slump continued this year and will likely fall further next year on the back of a weaker economy.