The shadow minister for housing, Senator Jan McLucas, is calling on the Reserve Bank of Australia to engage in housing policy questions since she is convinced the current government is not interested in capping current housing industry market dynamics.
Speaking exclusively to Real Estate Business as she leaves Cairns to appear in the economics committee inquiry in the Senate on Thursday, Ms McLucas said she was worried about housing dynamics in Sydney and Melbourne and wanted to hear the Reserve Bank explain its solutions to the problem.
“The evidence around foreign investment into the residential market is conflicted because the evidence on one hand states purchases from Asia are pushing prices up and others say completely the opposite, non-one can say unequivacably,” Ms McLucas said.
“The reason we are calling on the Reserve Bank to appear in front of the economics committee inquiry is to start asking questions around what it is contemplating, what it perceives the problem to be, what it proposes to fix.
“The current problem is obvious to me and many others in front of the committee that growth in house prices in Sydney and Melbourne, and to a lesser extent in Brisbane is concerning the community and will affect affordability, but we are not at a point to recommend the government do x or y – that is a matter for the government.”
CEO of Starr Partners Doug Driscoll said from his point of view the entire real estate industry needs more peripheral vision from the Reserve Bank because all agents and purchases need to know of any possible ramifications or repercussions from existing consumer sentiment.
Mr Driscoll said the market today is akin to a runaway train and said the existing demand may taper off over time, but statements so far have provided very little clue as to short, medium and long-term ramifications.
“If the committee can open our eyes to the potential future pitfalls then we can prepare for certain things,” Mr Driscoll said.
“At the end of the day a number of factors are at play, and not just low interest rates. There is a massive undersupply of housing when compared to 10-year averages, not enough properties hitting the market and a spin-off of low interest rates, which is a benefit and gain for property investors.
“A lot of the problems are a non-conversation.”