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'The housing industry is in a time of major transformation': Corelogic US
Topic Started: 20 Aug 2017, 06:47 PM (467 Views)
Rufus
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'The housing industry is in a time of major transformation': Corelogic US
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Australia's rising house prices reflect strong fundamentals, says Olumide Soroye, managing director of property data giant Corelogic's US Information Solutions.
Like Australia, which is experiencing rising house prices – which have doubled since the end of the global financial crisis – the US's affordability is also worsening, Mr Soroye, who visited Australia and New Zealand last week, said.

While the proportion of first-home buyers is higher in the US – 35 per cent of total buyers compared with about 8 to 9 per cent in Sydney and Melbourne – people trying to get into the housing markets for the first time are constrained in the US. Five years ago, first-home buyers were 50 per cent of the US market.

"The housing industry is in a time of major transformation and one of the forces at work that is going to drive that transformation is the affordability question," Mr Soroye said. 

"It exists here in the US and in Australia and New Zealand."

"Our view is the value of property since the GFC...the levels in the US while they are high they are still within range. We don't think there is a systemic overvaluation."
"The question is, how does the system respond?"

Mr Soroye said the use of macro-prudential tools – controlling lending to homebuyers – to cool the housing market was prudent and the US had done the same especially after the GFC.

But that was not enough to reduce prices, and the key solution was supply, Mr Soroye said. He suggested government intervention, home design and the release of more suburban greenfield land supported by strong infrastructure.

Reductions in stamp duty and assisted household funding could also help ease the affordability problem, Mr Soroye said.

Dispersing demand into the outer suburbs was another solution but it should be supported by fast trains and good roads. The pace of delivery of infrastructure must also be fast and timely.

Multi-generational homes on the rise
Importantly, the change in the designs of homes was crucial. Mr Soroye said in the US builders were starting to construct "multi-generational homes" to accommodate parents and their grown children on different floors.

"In the context of the US, in 10 years 20 per cent will be over 65. These are the type of parents who will have their millennial children come into their homes," he said.
"Millennials are over two thirds of first-home buyers so you need to figure out what to do with them."

And while planning was slow, particularly in NSW, Australia's supply delivery was still better than the US and even the UK, Mr Soroye said.

"You have a system that is fairly efficient, you don't have multi layers of lenders, agents compared to the US and even compared to the UK," he said.

"And if you look at the 26 years of economic successes it has not been just one sector sustaining performance. Whether that is luck or design, I will take it."

Corelogic is currently working on improving its property data platform in Australia and will consider further acquisitions.

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Jimbo
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Rufus
20 Aug 2017, 06:47 PM
'The housing industry is in a time of major transformation': Corelogic US
I gave up reading when they got to the bit about housing being an industry.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Rufus
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Jimbo
20 Aug 2017, 07:00 PM
I gave up reading when they got to the bit about housing being an industry.
Well of course you did.
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