PROPERTY MARKET BUBBLE OR BUST : Capital city house prices nationwide are expected to grow on average between five and nine per cent over the next year should the Reserve Bank leave rates unchanged and the Aussie dollar remain strong against the US. Sydneysiders enjoyed a momentous price increase of 15.6 per cent in the 12 months to June 2014, with a slight slowdown of between 8 and 12 per cent expected into 2015 SQM’s Housing Boom and Bust Report, released this week, predicts a housing market recovery is far from over, according to author Louis Christopher. Mr Christopher said the market is somewhat overvalued, but not by as much as some have very publicly stated. “I don’t believe at this stage the market is in a bubble,” Mr Christopher said. “Some cities are heading into overvalued territory, but the point overall is the market is far from a bubble situation when taking into account historical valuations over the past 30 years.” A recent report by the Bank for International Settlements stated Aussie house prices are the second highest in the world and warned there could be signs of a price correction in the future. BetaShares chief economist David Bassanese said much has been made of the claim by BIS that local house prices may be seriously overvalued. In his latest market insights report, Mr Bassanese said overall nationwide house prices have broadly tracked growth in household disposable income – albeit with cyclical peaks and troughs. “Despite all the hysteria regarding an Australian house price ‘bubble’, the most remarkable feature of prices over the past decade is how well behaved they have been,” Mr Bassanese said. Treasurer Joe Hockey took a swipe at those who claim Australia is in the midst of a housing bubble. Speaking at a Bloomberg forum earlier this week, Mr Hockey blamed any rapid price increases on a shortage of supply and dismissed any discussion of a housing bubble as being lazy analysis. Extract from SQM research. FOR A FULL MARKET REPORT, please inbox
Posted on: Fri, 19 Sep 2014 01:13:09 +0000
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