The prices of houses are likely to rise in Australia due to the growing housing shortage. Australia has been a trend setter for all housing boom throughout the world. Many new buildings are being built and their approvals have created a fear among the buyers of hike in price and rent of houses in Australia. This may put away many buyers from the market. The ANZ Bank says that Australia is facing a critical position due to shortage of houses. The rising immigration and the demand have more or less affected the shortage. The rising interest rates also continue to stump building recovery.

The housing demands have already exceeded the new ones and it has extended the demand to a high level. The Australian Bureau of Statistics survey says that the new apartment approvals fell 18.2 per cent in May and were down 4.2 per cent over the previous year. New house approvals declined 1.2 per cent and were down 1.7 per cent over the year. In Victoria, total building approvals were up 2.8 per cent. One of the economists says that the buyers are trying to escape from the property market because of the high rate of interest.

It is, however, essential to build more houses due to the increase of population year by year. The upcoming building owners and investors are scared by the hike in interest rates. So people are trying to stay in rental market and the investors are investing their money in the banks. Because of this situation of hike in prices of house both rental and selling, the investors are ultimately getting attracted and this leads to more construction of building. The fall in new residential approvals will only affect those persons going in for rent. However, the availability of apartments has not risen except the rise of those who want to rent it. Victoria tops the rent prices and the affordability of houses is likely to go down. The common view is that the hike in interest rates is the only reason for the decline of buyers in the property market. The buyers have to realize that the price will rise more even before they plan to re-enter the market. The building approval has slashed another interest rate increase from the Reserve Bank of Australia.

Thus, the prices rise of houses is likely to increase further in Australia because more investors are due for a hike in the interest rates. The buyers of the property market are diminishing because of the rise in the house rates. Those going in for rent are also affected because of the delay or fall in the approvals of new building. The main reason once again is the rise of interest rates and the inflation rate for the rise in house rates. The cost of living has also been increasing from the beginning of this year, which has largely affected the buyers who can only sit back and watch the situation. It is hoped that by the end of this year if the interest rate and inflation comes under control the house rates may come down.