A top economist says that even though it will add fuel to the fiery Sydney property market the RBA will make further cuts to interest rates. Shane Oliver, AMP chief economist, told AAP that Sydney “looks a bit bubbly” and warns that "The risks of a bust are certainly there”. Dr Oliver also says that there is some heat that could cause issues in other capital cities. However, he believes that the RBA will cut interest rates again, which is likely to see mortgage rates fall too, as there are plenty of other economic reasons for it to do so. His outlook is that there will be a cut in the interest rates this May with more to follow.
Property Council welcomes focus on housing affordability
At Thursday’s Council of Federal Financial Relations meeting there was a focus on housing affordability; something that has been welcomed by the Property Council of Australia. Federal, state and territory governments were all at the meeting and Ken Morrison, chief executive of the Property Council said that it’s encouraging that they recognise that new housing supply is critical to tackling affordability. Morrison commented: “Chronic undersupply is only now starting to be addressed with building approvals hitting record-highs. However, supply is still an issue with Sydney alone facing a shortage of some 190,000 homes within ten years.” The Property Council has put forward a number of proposals including tax reforms, zoning changes and planning reforms. Morrison says that it has to be a multi-pronged attack on the issue: “Housing affordability is not a problem that will fix itself: all governments must take responsibility for progressing reforms to boost supply and address what is a growing concern for Australians.”
Easter sees property market in Perth slow down
Mortgage brokers in the Perth area may have been waiting longer than usual for the phone to ring in the past week as the market slowed down for the Easter break. The Real Estate Institute of Western Australia says that after a flurry of activity at the end of March sales were down 47 per cent last week. All market sectors and both north and south of the river saw a downturn. Interestingly the slow Easter break was slower than previous years and was just 6 per cent behind the Australia Day holiday break. Sales were 17 per cent lower than the same period in 2013. The REIWA is expecting things to pick up again in the coming weeks although notes that the Anzac break could again slow the market.
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