Australasia is a sunny place mostly known for its Outback in Australia, its Great Barrier Reef, the Sydney Opera House and its kangaroos, and the heavenly landscape of New Zealand. However, Australia is a world player in many areas including economy and politics. In fact, the Australian economy is still galloping along at a healthy pace. In 2002 this healthy economic outlook was being driven in large part by new housing construction starts in the Australia real estate sector along with household consumer spending.

However, much like the property market in the United Kingdom the spiraling costs of housing in the Australasian real estate market have been checked by a stalled property sector. The Australasia real estate market is likely to remain flat for sometime as the banks have made three interest rate hikes during the past year which will naturally dampen any recovery that the Australasia real estate market might have made.

According to recent research families now need one third of their income to cover the costs of housing loans – a result that is far worse than it has been in the last twenty-five years. The interest rate hikes have made it especially hard for low-income families and first time buyers to enter the Australasia real estate market. Even with the government cash incentive for first time home buyers, people new to the property market are finding it very hard to get their feet wet.

What seems to be happening now in this region since the rate hikes took effect is that high income earners are tending to shy away from the more expensive inner core of the country’s cities. Instead these buyers are looking for properties in the middle ring suburbs – this in turn is pushing the middle income earners to the outer suburbs. The families in the outer suburbs are being hit the hardest as price growth has slowed to a crawl in these areas. The higher interest rates and the soft Australia real estate market has resulted in a more robust rental sector as more and more families are finding that it is much more affordable to rent than to buy property.

The Australasia real estate market will continue to remain flat in the near to mid-term so investors interested in investing in this beautiful region should definitely have long-range objectives; if they are looking to make a quick profit – they should probably try their luck somewhere else since the Australia real estate market is not a hot bet in the short term.

Read on and explore some of the most interesting facts on the regions of Australasia and what influences their property markets.