Residential real estate bubble 'unlikely to burst'
Australia's residential real estate market is unlikely to collapse, despite the predictions of ...
Australia's residential real estate market is unlikely to collapse, despite the predictions of industry commentators.
This is the opinion of Ian Verrender, senior business columnist at the Sydney Morning Herald, who claimed the housing sector is far stronger than most experts believe.
"It is true that our property is among the most expensive in the world," he stated in an article for Business Spectator.
"But don't bet the house on a property market collapse anytime soon. The property market, after edging lower in the past few years, is seeing early signs of life again."
Positive factors include declining interest rates, easier to obtain finance, and a healthy level of supply and demand.
The Reserve Bank of Australia dropped the key cash rate to three per cent in December, following previous drops in May, June and October.
Mr Verrender said availability and buyer interest in Sydney and Melbourne were the most important indicators of the property sector's status.
While Melbourne has a slight oversupply, he stated, Sydney is experiencing a shortage – which balances out overall.
The industry commentator also pointed to Australia's low unemployment as a reason to be optimistic, with homeowners able to pay their mortgages more easily.