Housing bubble won’t burst

02/09/2010

Better than expected retail spending and building approval figures from the Australian Bureau of Statistics cast doubt on the likelihood of a major housing correction, according to national accounting firm Chan & Naylor. “While a housing correction cannot be ruled out, the latest consumer spending and building approvals provide a barometer of overall economic confidence,” said Sal Carrero, Chief Executive, Chan & Naylor.

“It is hard to imagine a major housing price correction in an environment where interest rates and employment remain historically low. Mr Carrero said some capital city markets, such as Sydney, continue to experience strong rental growth which will assist in supporting home prices. “Increasing yields on investment property will support investor confidence in the market and indicates there is still value to be had for buyers. The property market continues to offer good prospects over the medium to long-term,” Mr Carrero said.

Source: Chan & Naylor