Inflation key to housing rally

Investors are needed to fund a big expansion in stock to cope with Victoria's rapidly increasing population, which is growing at 1.6%, or 82,430 people, a year. Australia's population increased 1.59%, or by 331,872 people, last year, but the country is reportedly experiencing a construction shortfall of 30,000 new houses a year.

"This kind of population growth will support the housing market, but it means that we're facing a long-term under-supply problem regardless of what may look like an over-supply in today's softening (conditions)."

Mr Lawless said buyers, particularly second or third-home owners with strong cash reserves, were well positioned to buy investment properties in the today's environment of flat price growth and oversupply.

Tourists flocking to Australia cause extra flights to be scheduled

Sydney Airport Corporation said 36 extra flights, including one charter flight, have been scheduled for the event, at which organisers expect to attract 125,000 people on Electronic Travel Authority (ETA) visas. Danny Casey, the Chief Operating Officer, said every flight in the lead up to the event is fully booked.

"World Youth Day is bringing international visitors into Sydney in droves. Sydney is going to come alive this winter with 125,000 young people from more than 170 nations arriving here to celebrate their faith with 100,000 young people from all over Australia," he told the World Youth Day official website. Christopher Brown, the Tourism and Transport Forum Managing Director, said bars, restaurants and hotels are expected to benefit from the tourism boom caused by young people travelling to Australia for the event.