House Price Risk: What's Driving Property Values?

With equities looking unreliable, Australians continue to rest assured that their wealth is as safe as houses when it's invested in direct property – and many are relying on it as a means of funding retirement. But property prices are more volatile than most people think – even within the same postcode, insist researchers from the Australian School of Business. A new model that takes in factors not normally considered in indices shows substantial discrepancies in the growth rates of house prices. Seasonal effects and a range of variables including interest and unemployment rates, equity prices and housing stock may cause market values to plummet or soar.