Doomsayer arguments losing fuel, says economist

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The reality of house price growth is proving a blow to headline-chasing doomsayers who can’t help but forecast an imminent collapse in Australian house prices, a leading pundit has claimed.

House prices showed a small rise in the September quarter, in a result that continues a recent level trajectory over a number of quarters.

The ABS detailed a 0.3% rise in house prices over the September quarter, a level 4.1% below their peak in 2010.

Housing Industry Association economist Geordan Murray said lower interest rates, a stable labour market, steadily rising household incomes, and population growth are providing a stabilising influence on prices.

“The economic reality must certainly be a blow to the headline-chasing doomsayers who can’t help but forecast an imminent collapse in Australian house prices,” Murray said.

However among the benign figures, the HIA did have a warning for WA policy makers, after an upward move of 1.8% in established dwelling prices.

“In combination with recent demographic data, the large move in the established price index for Perth should be ringing some alarm bells for the state’s policy makers," Murray said.

"With population growth in excess of 3%, demand pressure on the existing housing stock is mounting and we are seeing this manifest itself in escalating home prices."

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  • Rover177 says on 08/11/2012 01:28:50 PM

    I get quite annoyed with "the bubble has burst" comments. We are now getting back to our normal population growth after freezes on immigration by the Gillard Government. Just quoting a median price does not reflect all parameters of any market. Statistics for each price range can better reflect a change. The market of greatest concern to the investor is the market in which their investments are situated. A drop of $4 Million in Double Bay does not automatically affect my $450,000 unit next door. My market can be rising. Stop generalising and quote specifics and then an article may be believable.

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