No housing bubble in Australia, say property experts

A-number-of-experts-say-theres-no-bubble-in-Australia_157_80271_0_14099436_300Talk about the Australian housing bubble may well be overblown, according to some recent statements by Australian property experts.

Concerns that the Australian property market is a bubble ready to burst have been floating around for some time, due to what some observers see as overinflated house prices.

However, BT Financial Chief Economist Chris Caton put out a statement earlier in the month decrying such worries.

“Despite the hand-wringing of many, I remain convinced that house prices are not in a bubble,” he wrote on August 4.

Mr Caton further noted that as long as credit standards did not loosen and that the Reserve Bank kept the cash rate unchanged for the foreseeable future – which it appears it will – any correction in house prices would be unlikely.

Following this, Commonwealth Bank has outlined a number of reasons why Australia is not in the midst of a housing bubble in a recent presentation, according to several news outlets.

According to Commonwealth Bank, as reported in Property Observer, current prices are supported by demand outweighing supply, due to Australia’s population growth. It also pointed out that, while there is a lot of investment activity pushing up prices, this investor speculation is a natural result of the low interest rates reigning throughout the country right now.

Commonwealth Bank also pointed to the continued stringent lending standards, relatively low housing credit growth and the encouraging conditions of Australia’s economy as reasons why a bubble was unlikely to be taking place.

This should be happy news for any buyers looking to enter the market, either for investment purposes or in order to own a home. Concerns about a bubble are discouraging for buyers, who want to ensure their purchase holds its value. If these reports are anything to by, that prospect is unlikely to change anytime soon.

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