






{"id":11041,"date":"2021-02-16T16:56:51","date_gmt":"2021-02-16T09:56:51","guid":{"rendered":"https:\/\/www.asiapropertyawards.com\/?p=11041"},"modified":"2021-06-04T16:00:38","modified_gmt":"2021-06-04T09:00:38","slug":"australias-housing-market-booming-but-from-massive-debts","status":"publish","type":"post","link":"https:\/\/www.asiapropertyawards.com\/en\/australias-housing-market-booming-but-from-massive-debts\/","title":{"rendered":"Australia&#8217;s housing market booming, but from &#8216;massive&#8217; debts"},"content":{"rendered":"<p><span data-contrast=\"none\">Experts warn the country\u2019s record low-interest rates might be unsustainable<\/span><\/p>\n<figure id=\"attachment_11051\" aria-describedby=\"caption-attachment-11051\" style=\"width: 1000px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"size-full wp-image-11051\" src=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/02\/shutterstock_1041636379.jpg\" alt=\"\" width=\"1000\" height=\"563\" srcset=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/02\/shutterstock_1041636379.jpg 400w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/02\/shutterstock_1041636379.jpg 600w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/02\/shutterstock_1041636379.jpg 620w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/02\/shutterstock_1041636379.jpg 190w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2021\/02\/shutterstock_1041636379.jpg 1000w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><figcaption id=\"caption-attachment-11051\" class=\"wp-caption-text\">ShuangLi\/Shutterstock<\/figcaption><\/figure>\n<p><span data-contrast=\"none\">According to <a href=\"https:\/\/www.theguardian.com\/australia-news\/2021\/feb\/16\/the-australian-property-market-is-booming-but-the-gains-are-based-on-massive-debts\" target=\"_blank\" rel=\"noopener noreferrer\">The Guardian<\/a>, Australia\u2019s housing market is\u00a0<\/span><span data-contrast=\"none\">booming,<\/span><span data-contrast=\"none\">\u00a0and many positive signs are indicating<\/span><span data-contrast=\"none\">\u00a0a continuous upturn.\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">After<\/span><span data-contrast=\"none\"> property data firm CoreLogic\u2019s tracking of 1,191 auctions last week, the company saw 86.1 percent of properties sold, a 2.3 percent rise from the<\/span><span data-contrast=\"none\">\u00a0week before.\u00a0<\/span><span data-contrast=\"none\">Tim Lawless, head of research at CoreLogic, said such results haven\u2019t been seen since 2015. <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:120,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">\u201cWhen auction clearance rates are high, you expect house prices to be rising and vice versa.\u00a0<\/span><span data-contrast=\"none\">At the moment<\/span><span data-contrast=\"none\">\u00a0we\u2019re seeing\u00a0<\/span><span data-contrast=\"none\">clearance<\/span><span data-contrast=\"none\"> rates well above 80 percent. The last time we saw the same was in 2015, but you\u00a0<\/span><span data-contrast=\"none\">have to<\/span><span data-contrast=\"none\">\u00a0go back a decade to see\u00a0<\/span><span data-contrast=\"none\">auction<\/span><span data-contrast=\"none\"> markets as strong as this,\u201d said Tim. <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:120,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">CoreLogic\u2019s Home Value Index indicated strong growth in house prices throughout January, at 0.9 percent nationally and regional areas doubling that recorded in cities.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:120,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Nerida Conisbee, chief economist at global real estate company REA Group, mentioned that the booming is due to<\/span><span data-contrast=\"none\">\u00a0a pool of cheap money, high savings rate from those employed through 2020, a rec<\/span><span data-contrast=\"none\">eding pandemic, and a shift into regional areas. <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:120,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Nerida added, \u201c<\/span><span data-contrast=\"none\">you&#8217;re<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-contrast=\"none\">watching a<\/span><span data-contrast=\"none\">\u00a0realignment as people work out where they want to live and where they want to be employed.\u201d\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:120,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">\u201cThe\u00a0<\/span><span data-contrast=\"none\">recession<\/span><span data-contrast=\"none\">\u00a0we saw with the pandemic is not quite like what we\u2019ve seen elsewhere in the GFC where it was finance-led. What that\u2019s meant for property is there\u2019s no shortage of money. Interest rates are at incredible lows and those who had jobs were forced to save\u00a0during\u00a0rounds of lockdowns,\u201d she said.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:120,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Despite growing property values in regional zones like south Queensland and northern New South Wales, apartments and units in city areas have levelled from lower<\/span><span data-contrast=\"none\">\u00a0migration.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:120,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Interest rates have come off as low as 0.1 percent, a state the Reserve Bank of Australia (RBA) expects to hold until 2024.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:120,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">RBA governor Philip Lowe disregarded any concerns of a new housing bubble reforming, mention<\/span><span data-contrast=\"none\">ing that the growth was a positive sign of economic recovery post-pandemic.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:120,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">\u201cThere\u2019s a lot of focus at the moment on the fact that housing prices are rising again, and the stock market has been strong,\u201d said Philip. \u201cWell, the national house price index today is where it was four years ago&#8230;and the equity market, we\u2019re back to where we were at the beginning of last year.\u201d <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:120,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">However, experts are raising concerns<\/span><span data-contrast=\"none\"> about the government\u2019s homebuilder scheme and cash-flow initiatives, saying that this \u201ccheap money\u201d is a big driver of the recent price spike.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:120,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><a href=\"https:\/\/www.asiapropertyawards.com\/en\/australian-developers-offer-free-immigration-services-to-attract-chinese-buyers\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>More: Australian developers offer free immigration services to attract Chinese buyers<\/strong><\/a><\/p>\n<p><span data-contrast=\"none\">Professor Hal Pawson from the University of New South Wales said, \u201cit\u2019s the ability to take out AUD150,000 (USD116,859) more <\/span><span data-contrast=\"none\">on a<\/span><span data-contrast=\"none\">\u00a0mortgage than you could have had a year ago on the same salary. The\u00a0<\/span><span data-contrast=\"none\">concern<\/span><span data-contrast=\"none\">\u00a0about this is\u00a0<\/span><span data-contrast=\"none\">that, for<\/span><span data-contrast=\"none\"> lower-income<\/span><span data-contrast=\"none\">\u00a0earners in regional locations, they\u2019re going to be put under pressure as the result of these\u00a0<\/span><span data-contrast=\"none\">changes<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-contrast=\"none\">and<\/span><span data-contrast=\"none\">\u00a0it\u00a0<\/span><span data-contrast=\"none\">doesn&#8217;t<\/span><span data-contrast=\"none\"> flow through [to renters] immediately.&#8221;<\/span><\/p>\n<p><span data-contrast=\"none\">Martin North, the principal of Digital Finance Analytics, added that the federal government is attempting to further boost the situation by bending responsible lending laws, creating new debts. <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:120,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">\u201cBanks are lending six- or seven-times average incomes. They&#8217;re doing what they were doing before the royal commission. This is an unsustainable and a highly risky extension when we should be investing in more sustainable or longer-term solutions,\u201d he said.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:120,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Experts warn the country\u2019s record low-interest rates might be unsustainable\u00a0<\/p>\n","protected":false},"author":12,"featured_media":21009,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[92,1],"tags":[149,1079,650,1102],"class_list":["post-11041","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-property-report","tag-australia","tag-economic-recovery","tag-housing-market","tag-low-interest-rates","news_country-australia","news_author-property-report"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Australia&#039;s housing market booming, but from &#039;massive&#039; 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