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IMF warns of risky property price growth

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Your Investment Property | 17 Sep 2013, 09:00 AM Agree 0
The International Monetary Fund is calling for stricter lending rules for banks in order to prevent unsustainable growth in Australian house prices
  • Mika | 17 Sep 2013, 02:08 PM Agree 0
    Is it low interest rates causing the rise or is it local and foreign investment purchases which raise prices to an unobtainable level for local families??? One owner buys five houses in the same street by raising the price by $150.000 before auction is not uncommon. Houses bought before auction for $1.500.000 in cash...$200.000 above guide price pre-auction is not a natural rise in demand for housing or homes. Perhaps a control of owner occupy purchase or house ownership limit, as overseas, would see our market stabilise at a more sustainable level. As things are now, Australia provides the most fertile ground for 'land banking'.
  • Adrian | 17 Sep 2013, 07:15 PM Agree 0
    Yes, I definitely agree with this article. Currently Australian Property markets are rising but unemployment has also risen. This means we are in a two speed economy. The only solution I believe is to set a higher interest rate to new property purchases of minimum 7% for 2-4 years and a cheaper interest rate post this timeframe and for people with existing mortgages. A higher interest rate will mean that there is less people competing at auction which in turn does not create "bubble" prices. It also means that if people choose to save a greater deposit as a result of choosing not to buy in the present market, they are not faced with a much greater purchase price when they come to bid on the property they want to buy down the track.
  • Bob | 17 Sep 2013, 08:29 PM Agree 0
    Interest rates should go to 1-2%, this will make prices rise but it should then also hit a upper limit which is the true value of the market. look at US interest rates. we get smashed in Australia.
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