First-time buyers in Australia could find it difficult to take their first steps on the international property market this year, according to reports.

The Australian Associated Press reported that the level of housing stock on the market will decline and interest levels are set to rise creating difficulties for new buyers. Analysts believe that an increase in the number of skilled migrants entering the country will also place pressure on the market.

Joshua Williamson, an economist from Citigroup, told the news agency: "For first home buyers to get a foothold in the market, they are probably going to have to go further away from the main central business district in order to secure themselves a home."

He added that this could lead to an increase in the number of people choosing to rent for longer.

The Reserve Bank of Australia took the decision last week to keep interest rates unchanged at 3.75 per cent. In a statement the bank said that the "risk of serious economic contraction" in the country had "passed".

Mr Williamson said that he expects the central bank to increase interest rates in the coming year.

Posted by Charles Mackay.

Tags: interest rates