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By: Belinda Luc
Australia has narrowly missed out on the winners’ podium, ranking fourth in a list of the world’s top performing property growth centers.
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According to the Global Property Guide's latest survey, Australia achieved average annual price growth of 11.2 per cent in 2009.
Australia’s December quarter growth was 4.63 per cent, which more than recovered its 4.08 per cent downturn for all of 2008.
Of the 34 countries for which quarterly statistics are recorded, 23 recorded house price growth during the December quarter.
Seven countries, led by Israel, have recorded two years of positive growth. Ten countries have recorded two negative years.
The biggest price decline took place in Latvia, down 50.2 per cent last year, after a fall of 36.9 per cent in 2008.
But while house price growth continues to be bullish heading into 2010, some economists are worried that any frenetic growth will be followed by aggressive rate rises.
Economist George Tharenou said that if Australia replicated its 11.2 per cent house price growth in 2010, the central bank would have to hose the flames with higher interest rates.
“You can get to a position pretty quickly of an overpriced housing market and overleveraged households and that’s something the RBA would like to avoid,” Mr Tharenou said.
