Overheated home sector ‘a myth’

Macquarie Research Equities says it may be more myth than reality that the housing market is overheating in Australia. The report says that construction is the most important factor in the housing market and there's little chance of a slump while new starts remain in line with population growth and the value of each new property rises. There seem to be few signs that overbuilding is taking place the report states but there's threat to confidence due to the large number of apartments being built. Macquarie says that although a slump is unlikely, a limited fall in prices is a possibility. It says the main group to suffer would be investors particularly if interest rates fall again and more investors enter the market.

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