HSBC economist Paul Bloxham maintains there is no housing bubble in Australia, however he argues Sydney’s property market must be closely monitored, reports Property Observer
“In Sydney, this is going to be quite a challenge. The rest of the market doesn’t look over inflated. I don’t think there is a housing bubble in Australia,” he said in a recent summit hosted by Asia-Pacific Banking & Finance.
"I think that if Sydney sees the same trends as we have seen over the last year or two, that is, house prices running at an annual inflation rate of 13% year on year, then if that continues for very much longer you will need to see prices at some point come down.”
He suggested that similar macro-prudential policies in New Zealand should be adapted in Australia in the form of LVR caps.
“Those tools were effective for a very short period of time, but then the RBNZ followed up with lifting interest rates
,” Bloxham said.
“We had the RBNZ lift interest rates by 100bps last year between March and July. It was really probably that lift in interest rates that was the main thing that kept the housing market contained in the end.”
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now