Australia’s largest city faces a correction in property prices if current growth levels continue for much longer, according to the chief economist of a global bank.
Speaking at the launch of Genworth’s Home Grown report yesterday, Paul Bloxham, chief economist of HSBC Australia and New Zealand, said investor activity was "a bit frothy" in Sydney at the moment.
“We’re up 28 per cent over the past two years in terms of house prices, and investors account for 45 per cent of all new lending that’s going on in the Sydney market,”
Its not a bubble unless there is a crash (eg a pop), whats going to happen in Sydney in 2015 is probably a pullback where people realize rents cant keep going up to support such high prices and/or the risk of an interest rate rise at the end of 2015/2016 is going cause investors to "pause" on their ROI calculations........
Any movement by the Australian government to allow personal super to be "applied" to your primary home or some other enhancement to the "first home buyer scheme" is just inflationary in nature.
The Reserve needs to lead interest rate rises to cool the market off but we all know they're worried about industry slowing down as a side affect of that........
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