Reserve Bank Governor Glenn
Stevens spoke yesterday about housing affordability saying it’s the best it has
been in a decade.He said he was unconvinced house
prices were overvalued or considered unreasonably high even if the ratio of
home prices to income was higher in Australia than it was 15 years ago.
House prices have become more
affordable over the past few years but they are still high by world standards
and he has put Australia in the middle of the pack with those in comparable
though have warned for years that the Australian housing market is in a bubble,
much like the credit bubbles seen in Europe and the US before the global
financial crisis and fear for Australia's housing
market if global growth seriously faltered.
The world is so interconnected that if major problems did arise, then
things will get much worse (for Australia) and the biggest problem is the
Australian property market.
It has to be said that if in fact we are in a
housing market bubble, it seems to be taking quite a long time to pop - if
that's what it is going to do. The warning signs we would look for signalling
an imminent crash seem less in evidence now than five years ago.
Again these are general
comments on the Australian real estate situation as a whole not actually
specific areas or suburbs.