Ensure you never miss an issue of the
real estate business bulletin
Housing prices racing into dangerous waters

Housing prices racing into dangerous waters

by Reporter 0 comments

Staff Reporter 

The Reserve Bank of Australia is warning that property prices could begin to shoot upwards into unaffordable territory.

Speaking at the fifth annual Citi Annual Australian and New Zealand Investment Conference yesterday, RBA governor Glenn Stevens said the Reserve would be keeping a close eye on credit growth.

“While overall credit growth remains low at present, borrowing is increasing quite quickly in some pockets,” Governor Stevens said.

“Investor participation in housing in Sydney, in particular, is becoming noticeably stronger. Over the past year, the rate of finance approvals for this purpose has increased by 40 per cent.

“We have certainly experienced higher rates of growth of finance than that in the past, and it may be that we are seeing some catch-up from a delayed initial response to fundamentals favouring more investment in housing.”

Mr Stevens went on to warn lenders and borrowers alike that if this activity were to continue, that they should take due care.

“It is very important that strong lending standards remain in place, and that decisions be based on sensible assumptions about future returns.

“That's what we need if we are to experience a long and sustainable expansion in housing investment that houses our growing population at acceptable cost, and pays reasonable returns on the capital deployed.

“That's the sort of outcome we want, as part of the more balanced growth path for the economy we are seeking over the years ahead.”

Housing prices racing into dangerous waters
lawyersweekly logo
FROM THE WEB
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
The rapid growth in cyber attacks within the real estate industry

Any successful agency will swear by the importance of an extensive database and building trust with clients, but with the rise in cyber thre...

View all podcasts

What keeps you awake at night?

The threat from the so-called digital disruptors like the property portals, DIY models and lead generating platforms
Competition from other agents in my local catchment area
Changes in the traditional real estate model and an uncertain future for the industry
The current cooling markets and other economic influencers
Nothing. I back myself to meet the challenges ahead
Do you have an industry update?