Financial confidence shores up property prices

Posted on April 4, 2009 by peter 
Filed under Australia Mortgage and Finance News · Tagged: ,

A G20-inspired wave of optimism has swept the world, boosting stock markets and reducing the chance of property prices dropping further.

World leaders agreed to inject $1.58 trillion into the global economy in a historic deal to kick-start growth and save jobs.

The leaders of the world’s top 20 economies, including Prime Minister Kevin Rudd, announced the deal at the end of their London summit.

The Real Estate Institute of Victoria welcomed the announcement, saying the spending would help put a floor under property prices. “The property market will benefit from any improvement in economic conditions, particularly if it results in economic growth,” chief executive Enzo Raimondo said.

Chief economist at AMP Capital Investors, Shane Oliver, said the G20 announcement had helped to push the stock market higher for a fourth week.

“While it’s too early to say shares have bottomed, there are certainly positive signs. Further gains are likely over the next few months,” he said.

Mr Rudd called it a concrete plan to beat the effects of the global recession set off by the collapse of banks in the US.

“It’s been prime ministers and presidents who have struck this deal, but it’s small businesses, tradies and young people who will benefit from it over time,” he said.

Mr Rudd said the G20 deal cracked down on “cowboys” who had brought global markets undone. Treasurer Wayne Swan added: “Any measure globally which supports growth and jobs assists the stimulus the Australian Government has put in place to support that.”

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