It’s a happy new year for property in Australia

Despite recent interest rate rises, the phasing out of the first-home buyer grant, and mounting concerns that a recession is looming, the Australia housing market ended 2009 on a high, and is expected to carry on its success in 2010.

The average price of a home in Australia appreciated by 11.3% during the first 11 months of last year, compared to a fall of 3.8% in 2008, according to data compiled by property RP Data and Riskmark International.

Property in Darwin was considered the best performing capital city with values up 17.9% during the 11 months.

Adelaide was the worst, recording an increase of just 5.7%.

Christopher Joye, managing director of Rismark International, said the statistics showed that the Australia property market was less sensitive to interest rate rises and the abolishment of the firt home buyer grant.

“The story here is we saw quite spectacular growth in contrast to the quite pessimistic predictions,” he said. “The key driver of Australian housing demand in the latter half of the year appears to have been upgraders and investors. We expect this trend to continue in 2010.”

Buy-to-let investors seeking to buy a home in Australia may be keen to learn that the best rental yields - around 6% - can be achieved in Darwin.