No property price bubble for Australia

No property price bubble for Australia

29 October 2012 by Staff Reporter 0 comments

Staff Reporter

The notion that Australian housing is in a price bubble is misguided, BT’s chief economist Dr Chris Caton has claimed.

Speaking at the Vow conference in Phuket, Thailand, Dr Caton said based on a simplistic comparison with the US housing market, an argument can be mounted that Australian housing prices are overpriced when measured in terms of disposable income.

“But when other countries are thrown into the mix, the argument that we have a housing price bubble in Australia is much harder to sustain,” he said.

“The fact is our housing prices are in broad alignment with many similar economies, so it’s my belief talk of a housing bubble is misplaced.”

Dr Caton also had other good news for the audience of mortgage brokers when he predicted lower rates and higher housing prices over the next 12 months.

“Although I’m not as bullish as some other economists on lower interest rates, I still expect at least one cut in the cash rate and possibly two as the Reserve Bank prepares for a downturn in mining.”

On housing credit and house prices, he said expects a pick-up over the next year, with Western Australian – “not unsurprisingly” – to lead the pack.

“I suspect we will be back at next year’s conference and housing prices will have risen over the past 12 months,” he said.

Staff Reporter

The notion that Australian housing is in a price bubble is misguided, BT’s chief economist Dr Chris Caton has claimed.

Speaking at the Vow conference in Phuket, Thailand, Dr Caton said based on a simplistic comparison with the US housing market, an argument can be mounted that Australian housing prices are overpriced when measured in terms of disposable income.

“But when other countries are thrown into the mix, the argument that we have a housing price bubble in Australia is much harder to sustain,” he said.

“The fact is our housing prices are in broad alignment with many similar economies, so it’s my belief talk of a housing bubble is misplaced.”

Dr Caton also had other good news for the audience of mortgage brokers when he predicted lower rates and higher housing prices over the next 12 months.

“Although I’m not as bullish as some other economists on lower interest rates, I still expect at least one cut in the cash rate and possibly two as the Reserve Bank prepares for a downturn in mining.”

On housing credit and house prices, he said expects a pick-up over the next year, with Western Australian – “not unsurprisingly” – to lead the pack.

“I suspect we will be back at next year’s conference and housing prices will have risen over the past 12 months,” he said.

promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2016

With a combined sales volume of $13 billion in 2016, the Top 100 Agents ranking represents the very best sales agents in Australia. Find out what sets them apart and learn their secrets to success.

featured podcast

featured podcast
REVEALED: The 10 best agents in Australia for 2017

For the first time ever, the top 10 agents in the REB Top 100 Agents ranking are revealed in this exclusive podcast. ...

View all podcasts

Are dodgy agents being punished enough?

Yes (8.6%)
No (55%)
Only in some states (2.3%)
Not all dodgy agents are being found out (34.1%)

Total votes: 220
The voting for this poll has ended on: April 15, 2017
Do you have an industry update?