Australia

During the 1990s Australia maintained affordable property prices and a relatively low cost of living. The country was moving away from attempts to attract more Asian migrants and was becoming a focus for investors from Europe and the USA.

Under pressure from these international investors and coupled to local demand, property prices in the country doubled between 1996 and 2003. However, such rapid growth proved unsustainable in the longer term and the market began to overheat.

Early in the new millennium prices peaked - varying by degree and timing in the country's major cities - and it briefly appeared the housing market was heading for a dramatic crash.

However, in hindsight much of the concern appears unfounded. John Howard's government raised interest rates, was able to control inflation and consequently took some of the sting away from a housing crash.

Boom, but no bust

While homeowners in some areas did slip into dreaded negative equity, the slump was not as dramatic as once forecast.

Prices reached a soft landing and have recently begun to increase in some areas of the country again; albeit in a more controlled and sustainable fashion.

According to overseas re-location site Shelter Offshore, prices increased by an average of 8.3 per cent in 2006, up from a level of just two per cent growth in 2005.

The average price for the country as a whole is $459,402 (£202,153), according to RP Data-Rismark Index.

Regional variations

Yet, the Australian property market is strongly differentiated by location; with several key property hotspots based around the large cities.

Sydney is the most expensive city in the country but still has lower average prices than many areas of the UK.

The average property price in Melbourne stood at $398,217 (£175,202), in the second quarter of 2007, according to Australian Property Monitors (APM).

This compares to Canberra which has an average property prices of $319,517 (£140,406) – which had seen prices increase 17.6 in the year to July 2007, according to APM.

Other key cities include Brisbane, Adelaide, and Perth.

Rental prices also vary by location, with Canberra among the most expensive, at $395 per week for a three-bedroom home, according to the Real Estate Institute of Australia (REIA).

Prices fall to $250 per week for a three-bedroom property in Adelaide – which is among the cheapest places to rent in the country - according to the REIA.

Interest rates are presently sitting around the six per cent mark in Australia and employment is strong. There is also a strong level of sustainable demand and the property market appears to be entering a period of stable growth.