Link here As low interest rates spur a jump in property prices and high clearance rates, in major cities at least, talk of a housing bubble is rising – although there are also plenty of experts seeking to cool the speculation. Here’s what some of them have said:
• “I’d submit that anyone not investing serious time contemplating housing hazards, including the prospect of destabilising bubbles, should wake up” – Financial Review columnist Christopher Joye.
• “I don’t think we should overreact to the current market; instead we should see opportunity ... let’s look at the glass being half-full when it comes to housing stock and housing prices” – Treasurer Joe Hockey.
• “I don’t think there’s a bubble. The Reserve Bank affordability data says that it’s probably under control” – Mark Johnson, former deputy chairman, Macquarie Group.
• “It is popular to talk about a property bubble but there is probably no evidence ... we’ve seen clearance rates inch up on low volumes but it’s way too early to call a boom” – Dion Hershan, head of Australian equities for Goldman Sachs Asset Management.
• “There are periods when the rate of increase in house prices has been higher than average and periods when it has been lower than average. We are in a one of the higher-than-average periods at the moment but the continued rushing to reach for the bubble terminology ... every time the rate of increase in house prices is higher than average, which by definition is 50 per cent of the time, you just have to be unrealistically alarmist on making that call every time it happens” – RBA assistant governor Malcolm Edey.
• “[A property bubble] just seems to be inevitable. The only question is when. Everyone is hoping that the economy will recover soon enough and quick enough that we can reverse the stance of [monetary] policy ... But if the [slowing] mining boom leads to further deterioration, which I think it will, the pressure will be for interests rates to go lower and then the bubble thing becomes much more of an issue” – Former Reserve Bank of Australia board member Bob Gregory.
• “My position on the housing bubble debate is fairly clear: while we can all debate what might happen in the future, it’s simply wrong to suggest the market is in a speculative state. All we’ve seen so far is a natural cyclical home price response to low interest rates and earlier house price weakness” – Financial Review columnist David Bassanese.
• “[Property bubble is] a vague term, there has been some recent euphoria around the Sydney market, and interest rates have caused a lot of speculation, but a number of factors need to be accounted for ... Most people who say we are heading for a property bubble don’t know what one looks like” – Deakin University academic Philip Soos.
• “I haven’t seen [the Sydney property market] this hot since the last real estate boom ... If there is pressure to keep growing at this level – which I don’t suspect we will – quarter after quarter after quarter, we’d probably end up in trouble because we just can’t grow this rapidly” – McGrath fears property market running too hot.
Any expressed market opinion is my own and is not to be taken as financial advice
You know Soos is a bubble guy. Don't try and steal him. You feel at a loss because of Joye giving a bit of credit to us good guys?
Quote:
In the debate over the housing market, it is important for those who have vested and conflicts of interest to avoid using definitions of an asset bubble so as to create confusion regarding this matter. Further, it is difficult to claim the presently low interest rates could risk causing a housing bubble when it is readily apparent one has existed since 2001.
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
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