AI
Wednesday, November 13, 2013 9:01:46 PM
Australian housing bubble as USA and other countries experienced? .. literally for years i have seen,
you guys would have seen them too .. still do .. all over the web, as those little things even in links which
have no relation to housing .. dire warnings of a housing bubble burst in Australia .. this is the latest on that ..
Friday, 1 November 2013
It’s the transition, stupid — keeping property in context .. Glenn Dyer and Bernard Keane
http://www.crikey.com.au/2013/11/01/its-the-transition-stupid-keeping-property-in-context/
====
No housing bubble, says RBA official
Adam Creighton
The Australian
September 19, 2013 12:00AM
Source: TheAustralian
A SENIOR Reserve Bank official has attacked talk of an Australian house price bubble as "unrealistically alarmist" in response to growing concerns ultra-low mortgage rates were pushing up house prices to unsustainable heights.
Malcolm Edey, the Reserve Bank's assistant governor for financial stability, conceded that demand for houses had jumped, but argued that the ratio of house prices to household incomes remained stable.
"We shouldn't be rushing to reach for the bubble terminology every time the rate of increase in house prices is higher than average, because by definition that is 50 per cent of the time," he said.
RBA data indicates the ratio of average dwelling prices to average household incomes has hovered between 4 and 5 since 2003, having been under 3 from the early 1970s to the mid-1990s, but ignores variation across states and even suburbs, where house price speculation typically occurs.
"There's no doubt demand for housing now is strengthening, but it's important to keep this in perspective," Mr Edey said.
Speaking yesterday at the Financial Services Institute of Australasia annual conference in Sydney, he argued that house prices over the decade had risen at a slower pace than household incomes, but grew more quickly or slowly for extended periods.
Minutes from the Reserve Bank's latest interest rate meeting, released earlier this week, indicated its board was "closely monitoring . . . property gearing in self-managed superannuation funds".
Australian capital city house prices, routinely ranked among the highest in the world, rose at an annual pace of almost 10 per cent over the three months to June and have continued to edge up since.
At the same time, investors' share of new home loans rose to the highest level in a decade in July, even though total credit growth is still at historic lows.
John Laker, head of the Australian Prudential Regulation Authority, said regulators would be willing to use macro-prudential rules, such as caps on loan-to-valuation ratios, if necessary.
"But there are a range of other actions that each supervisor can take before taking recourse to such monetary policy instruments, and those tools really involve engagement with institutions day by day," he said.
New Zealand's central bank, facing booming house prices thanks to low interest rates and Christchurch earthquakes that demolished a significant part of the country's housing supply, is about to cap the share of loans with loan-to-valuation ratios above 80 per cent.
The International Monetary Fund this week called for more widespread use of macro-prudential rules to help regulators grappling with weak economic growth and surging house prices.
Mr Laker said risks in the sustained low-interest rate environment would grow over time, suggesting banks might come under pressure to lower their lending standards, as they did in the early 2000s, and that borrowers might be unable to repay their debts when rates returned to normal levels. "But the low-interest rate environment is a positive for Australia, as it's part of the broad macro-setting and part of the process by which the economy rebalances its growth," he said.
Asked about the Abbott government's promised financial system inquiry, Mr Laker said APRA "welcomed scrutiny" and would provide any resources required for any secretariat.
"Obviously it is 15 years since the last major inquiry, and it's always good to go back and have another look to see whether there are improvements," he said.
ASIC Commissioner Greg Tanzer, also at the conference, said the growth of superannuation assets, which are projected to outweigh the banking system, and so-called shadow banking would be good topics to cover.
Regulators fear tighter rules on local financial institutions will push more business into the less regulated sector.
http://www.theaustralian.com.au/business/economics/no-housing-bubble-says-rba-official/story-e6frg926-1226722359476
.. i'm just sick of seeing the warnings .. lol, of course, we all hope Malcolm Edey has it right ..
you guys would have seen them too .. still do .. all over the web, as those little things even in links which
have no relation to housing .. dire warnings of a housing bubble burst in Australia .. this is the latest on that ..
Friday, 1 November 2013
It’s the transition, stupid — keeping property in context .. Glenn Dyer and Bernard Keane
http://www.crikey.com.au/2013/11/01/its-the-transition-stupid-keeping-property-in-context/
====
No housing bubble, says RBA official
Adam Creighton
The Australian
September 19, 2013 12:00AM
Source: TheAustralian
A SENIOR Reserve Bank official has attacked talk of an Australian house price bubble as "unrealistically alarmist" in response to growing concerns ultra-low mortgage rates were pushing up house prices to unsustainable heights.
Malcolm Edey, the Reserve Bank's assistant governor for financial stability, conceded that demand for houses had jumped, but argued that the ratio of house prices to household incomes remained stable.
"We shouldn't be rushing to reach for the bubble terminology every time the rate of increase in house prices is higher than average, because by definition that is 50 per cent of the time," he said.
RBA data indicates the ratio of average dwelling prices to average household incomes has hovered between 4 and 5 since 2003, having been under 3 from the early 1970s to the mid-1990s, but ignores variation across states and even suburbs, where house price speculation typically occurs.
"There's no doubt demand for housing now is strengthening, but it's important to keep this in perspective," Mr Edey said.
Speaking yesterday at the Financial Services Institute of Australasia annual conference in Sydney, he argued that house prices over the decade had risen at a slower pace than household incomes, but grew more quickly or slowly for extended periods.
Minutes from the Reserve Bank's latest interest rate meeting, released earlier this week, indicated its board was "closely monitoring . . . property gearing in self-managed superannuation funds".
Australian capital city house prices, routinely ranked among the highest in the world, rose at an annual pace of almost 10 per cent over the three months to June and have continued to edge up since.
At the same time, investors' share of new home loans rose to the highest level in a decade in July, even though total credit growth is still at historic lows.
John Laker, head of the Australian Prudential Regulation Authority, said regulators would be willing to use macro-prudential rules, such as caps on loan-to-valuation ratios, if necessary.
"But there are a range of other actions that each supervisor can take before taking recourse to such monetary policy instruments, and those tools really involve engagement with institutions day by day," he said.
New Zealand's central bank, facing booming house prices thanks to low interest rates and Christchurch earthquakes that demolished a significant part of the country's housing supply, is about to cap the share of loans with loan-to-valuation ratios above 80 per cent.
The International Monetary Fund this week called for more widespread use of macro-prudential rules to help regulators grappling with weak economic growth and surging house prices.
Mr Laker said risks in the sustained low-interest rate environment would grow over time, suggesting banks might come under pressure to lower their lending standards, as they did in the early 2000s, and that borrowers might be unable to repay their debts when rates returned to normal levels. "But the low-interest rate environment is a positive for Australia, as it's part of the broad macro-setting and part of the process by which the economy rebalances its growth," he said.
Asked about the Abbott government's promised financial system inquiry, Mr Laker said APRA "welcomed scrutiny" and would provide any resources required for any secretariat.
"Obviously it is 15 years since the last major inquiry, and it's always good to go back and have another look to see whether there are improvements," he said.
ASIC Commissioner Greg Tanzer, also at the conference, said the growth of superannuation assets, which are projected to outweigh the banking system, and so-called shadow banking would be good topics to cover.
Regulators fear tighter rules on local financial institutions will push more business into the less regulated sector.
http://www.theaustralian.com.au/business/economics/no-housing-bubble-says-rba-official/story-e6frg926-1226722359476
.. i'm just sick of seeing the warnings .. lol, of course, we all hope Malcolm Edey has it right ..
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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