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Home arrow News arrow Home prices to explode, ANZ Bank predicts

Home prices to explode, ANZ Bank predicts

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Wednesday, 02 July 2008

With a growing population and simultaneous housing shortage, Australia’s house prices are set to go through the roof, according to ANZ’s economists.  Yet given new apartment approvals fell 18.2%, those forced to stay in the rent trap are faced with a tighter and tighter squeeze. 

Home Prices to Explode



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Average Jo - Price fix   | | 2008-07-16 10:50:17
I don't agree that there is a housing shortage. The problem is that all the available houses are too expensive for the average Australian. Why have house prices tripled in the last eight years? When is someone (ie: Govt) going to step in and fix this valuation mess? Housing is a necessity of life, why are speculators allowed to control this? All questions I would like answered.
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Joe Bloggs Economics 101   | | 2008-08-03 00:50:17
Hi Average Jo, most Gov't policy makers agree that there is a problem but the issue is quite complex. The speculation you refer to is the result of a combination of policy settings and economic conditions that effectively transfer wealth from would-be new home buyers to existing property owners. This includes tax treatment of investment property (i.e. negative gearing), land release and housing regulation by States, stamp duty revenues, and skilled migration policy. Australia's booming economy and relaxed lending practices have also enabled many people to borrow a lot more in recent years. Make no mistake--the double-digit price growth we are seeing is the result of an acute housing shortage relative to demand, caused by this potent cocktail of policies and market conditions. Current estimates point to a deficiency of about 30,000 dwellings Australia-wide each year. The problem is not one of market failure, but one of unequal distribution of wealth. Thus, very few economists (Gov't and...
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