RBA assistant governor Malcolm Edey has spoken out against claims that Australia is facing a house price bubble at a Sydney conference.
While he admits that house prices have risen, Australian Financial Review reports show Edey urging economists and those in the property industry to remain level-headed.
“House prices have risen at a rate similar or level to growth in household income… The ratio has been roughly flat or tending actually to fall. Within that trend, there will be cycles and periods where that ratio rises or falls,” he said.
“But we shouldn’t be rushing to reach for the bubble terminology every time house prices are above average because you will be unrealistically alarmist.”
Edey said the country is currently experiencing a low rate environment and that one of the effects is a stimulation in housing demand.
“We are seeing that influence in the housing sector and that’s not surprising because it’s an interest rate sensitive sector,” he said.
Edey also pointed to comments in the RBA’s most recent meeting minutes, which addressed rising house prices.
“We… indicated this is an area to watch but we do need to keep it into perspective.”
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
Top Suburbs :
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.
We value your privacy and treat all your information seriously - you can check out