No housing bubble

17/06/2010

Residex chief executive officer John Edwards said despite widespread concern, Australia was not experiencing a house price ‘bubble’. “The interest rate increases, I think can now be said to have been largely absorbed and those who were going to be excessively stressed from the first group of increases have probably largely exited the market or will do so very shortly,” Mr Edwards said.

“I suggest this as the number of Suburbs falling in value due to excess sale stock, where mortgage stress would be seen (those in the lower cost areas) are less than at the peak. The first wave peaked in February and since then it has been reducing. The impact of the next group of interest rate increases is starting to flow through. This will result in some moderate increases in Suburbs moving to negative growth.” Mr Edwards said Melbourne is likely to be the most impacted by rising rates.

Source: The Advisor