RBA lending curbs will hit housing, warns Triguboff
THE AUSTRALIAN SEPTEMBER 26, 2014 12:00AM
Turi Condon
Property Editor
Sydney
John Abernethy on Real Estate prices
Founder of Meriton Apartments Harry Triguboff pictured on Wednesday in Sydney.Meriton Apartments founder Harry Triguboff says any move by the RBA to restrict lending ‘would 100pc scare the housing market’. Picture: Nikki Short Source: News Limited
John Abernethy on Real Estate pricesFounder of Meriton Apartments Harry Trig...
BILLIONAIRE apartment developer Harry Triguboff says any move by the Reserve Bank to curb residential property lending and take the heat out of investor activity could seriously damage confidence in Australia’s housing market.
The RBA was a powerful body in people’s minds, Mr Triguboff said.
“It would 100 per cent scare the housing market,” he said.
In its Financial Stability Review this week, the RBA signalled it could restrict banks’ lending to the housing sector in a bid to ward off a housing bubble and the flow-on risks to the banking sector. The bank said it was in discussions to take “further steps to reinforce sound lending practices, particularly for lending to investors”. Mr Triguboff said: “Suddenly the RBA has changed its mind; they hear the geniuses from overseas telling them what to do. This is very bad. They shouldn’t be scared of being different from them, they should be pleased we are different (that Australian housing markets are doing well).”
Mr Triguboff’s Meriton, which builds only apartments, was this week named Australia’s most prolific home builder in a Housing Industry Association survey, with almost 8000 units under way in the year to June, up from 2600 the year before.
Mr Triguboff said surging prices were confined to Sydney and Melbourne.
About 60 per cent of Australia’s property market had moved little in recent years, he said.
House prices in Sydney jumped 16.2 per cent in the year to August, while Melbourne’s prices rose 11.7 per cent, according to researcher RP Data. However, Canberra’s residential prices edged up only 1.4 per cent for the 12 months, Hobart rose 2.8 per cent, Perth 3.5 per cent, Brisbane 5.4 per cent and Adelaide 5.9 per cent.
Mr Triguboff said prices in Surfers Paradise were the same as 10 years ago, while upper-end Gold Coast homes that had sold for $3 million or more were now worth $2m.
Coastal areas and cities such as Adelaide, where price growth has been slow, would be hardest hit if bank lending to housing was restricted or conditions applied to investor lending, he said: “Areas that are not good will completely die.”
Mr Triguboff said people should be concerned when property prices did not go up, not when they did.
“We should worry about that just as much because when it does not go up, supply dries up,” he said.
Mr Triguboff joined other bankers and developers in saying there would be unintended consequences from any crackdown on bank lending to the housing sector. If confidence faltered, land prices would fall and the site owners would hold on to the properties until prices recovered, in turn compounding the housing undersupply, he said.
Mr Triguboff also noted that any restrictions on Australian bank lending would penalise domestic and lower-price-range buyers and provide an advantage to offshore purchasers.
He said Chinese buyers (local Chinese and mainland Chinese) — which are driving sales and prices in some suburbs — tended to put down larger deposits, with mainland Chinese buyers often borrowing more offshore.
Meriton sells a large chunk of its apartments to Australians of Chinese descent and mainland Chinese buyers.
Aussie Home Loans says the housing solution lies in supply
Shaun Drummond
505 words
26 Sep 2014
The Age
AGEE
English
© 2014 Copyright John Fairfax Holdings Limited. Factiva.Gateway.Messages.Archive.V1_0.ELink
Aussie Home Loans executive chairman John Symond says governments should dampen property prices by increasing housing supply rather than regulators intervening to douse demand.
"I think at the moment it is premature," he said of the Reserve Bank's indications it may tighten lending rules to reduce the risk of a sudden property price crash.
"It is all very well to look at Sydney and say, 'Wow, look at how property prices have gone up in the last two years!' What about the previous 10? Average 2.2 per cent growth before inflation, the worst-performing capital city in the land."
Big house price rises in the past year in Sydney and Melbourne are simply a function of housing supply not keeping up with high demand from fast population growth allied with low interest rates, he said. This had driven investors to buy, adding to price rises and forcing out first-time buyers.
Even using targeted measures, he said, it was not easy for the RBA and the Australian Prudential Regulation Authority to deal with that. "I think it is very hard for the prudential bodies to target without having probably some unintended consequences," he said.
"The reality is governments have failed to address the orderly supply of housing. There are so many reasons first home buyers have been forced out: the cumbersome bureaucracy to get land releases, the cost per apartment or housing block is anything from $100,000 to $150,000."
Mr Symond said the glut in apartments in Sydney and Melbourne, however, would lead to a "tapering" of prices there. But barring a big rise in interest rates, he argues prices won't crash.
Kim Cannon, the managing director of non-bank lender Firstmac, a 30-year veteran of the sector, also argues the problem at the moment is "good old-fashioned supply and demand".
Most of his borrowers are investors and he recently has raised Firstmac's maximum loan-to-valuation ratio to 90 per cent to remain competitive. But the average across its loan book is 62 per cent and he said he did not want to see borrowers investing on a 5 per cent deposit and relying on rent to repay.
"The time to worry is in a speculative market - when people are buying and selling off the plan without even seeing the property. But I just don't think it is a speculative market," he said.
There are suggestions APRA may enforce present guidance to place a buffer on interest rates to test borrowers' ability to withstand a rate rise.
Mr Symond and Mr Cannon say a 2 per cent buffer is standard practice.
But it could be a problem if there was a set "add-on" when rates go higher. "On these rates now, it wouldn't make much difference, but if [interest rates] go to 6 per cent, then using a 3 per cent buffer is a high number."
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Top earners carry most debt
Edmund Tadros
776 words
26 Sep 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Most housing investor debt is owed by high-income households with the ability to service their payments when property price growth moderates, the Reserve Bank says.
Despite concern that the household debt-to-income ratio is moving beyond its already high level of 150 per cent, a breakdown of investors shows a more nuanced picture.
The Reserve Bank analysed the types of households and the ages of the growing crop of housing investors and found it was the highest-income households that owed most (60 per cent) of the total investor housing debt.
These investors were "fairly well placed to service their debt" and "typically (used) less than 30 per cent of their income to service their total property debt", the central bank found in its biannual Financial Stability Review, released on Wednesday.
RP Data senior analyst Cameron Kusher said it was typically higher-net worth individuals who chose to invest.
"This group is in a better position to cope in the event of a downturn."
In the report, the Reserve Bank said it had found no signs of reckless lending but it was actively examining the use of credit controls in an attempt to calm the market.
The central bank warned that "the composition of housing and mortgage markets is becoming unbalanced, with new lending to investors being out of proportion to rental housing's share of the housing stock".
The warnings are effectively aimed at investors with lower incomes, or ready access to liquid assets, who have rushed into the hot inner-city Melbourne and Sydney markets without considering the impact of slower price growth.
One in 10 Australians aged over 15 is now a property investor and those investors are increasingly using negative gearing.
Older Australians are rushing to invest in property, with a jump in the number of investors who are aged 60-plus.
"This older group now makes up one in five property investors.
The increase in property investment has come as investors seek assets with higher returns and with the Reserve Bank keeping it's cash rate a record low of 2.5 per cent for 14 consecutive months.
"The (Reserve Bank's) concern is you're seeing a lot of investors in the market treating property like a short-term asset," Mr Kusher said.
"It's a non-liquid asset, and the concern is what happens once the price growth isn't there or equity market picks up?
" Interest rates are low, so if you keep your money in the bank you're not making a return.
"At the moment, when you look at 16 per cent growth in Sydney property prices and 11.5 per cent in Melbourne, it's hard to find anything to compete with that."
The property boom has been focused in Sydney and Melbourne.
"If you have a look at where more of the investor activity is happening, it is inner-city apartments, units and townhouses in Melbourne and Sydney," Mr Kusher said.
"You're creating more risk in that geographic area rather than spreading that risk throughout the country."
The Reserve Bank highlights the concentration of construction and lending activity in Sydney and Melbourne and notes the Melbourne apartment market at risk of "localised oversupply".
The Domain Group senior economist Andrew Wilson echoed this point:
"That Melbourne high-rise CBD [central business district] market certainly looks like it is saturated.
"Melbourne doesn't have the magnetism of inner-city living as, for example, Sydney does."
Overall, the central bank found the supply of housing was still catching up to demand, with vacancy rates remaining low.
The report found a drop in highly-leveraged lending but many investors were still opting for interest-only loans.
"What that rise in the number of interest-only loans highlights is that there is a lot of investor activity in the market and if house price or the market turns, you might find a lot of people looking to exit the market at the same time," Mr Kusher said.
No matter what happens with lending controls, what lies ahead for property investors is uncertain.
The central bank's use of it's most-effective house price lever, interest rates, is limited by a sluggish wider economy.
Mr Kusher said: "Mainly, the central bank's concern is the great unknown – what happens once the growth isn't there or the equity market picks up?"
Dr Wilson added: "We are in unchartered waters in terms of the investment market. Every cycle is different.
"The (Reserve Bank) is signalling its concerns so there will be orderly disengagement from the market – without regulatory incursion."
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Comparing prices in Singapore and Australia was “something of an apples and oranges” exercise due to Singapore’s very small land area which limited supply, and very different tax regimes. “However, no one would argue Singapore apartments are worth more on a per square foot basis,” he said.
This sort of price gap would eventually drag Australian capital city values up and see a structural change in our housing market, he said.
Housing market gone global, says Bill Moss
THE AUSTRALIAN SEPTEMBER 27, 2014 12:00AM
Turi Condon
Property Editor
Sydney
THE former Macquarie Group banker and head of property Bill Moss says Australian homes are becoming a global commodity, arguing any moves by regulators will do little to stem the wave of offshore buyers pushing capital city prices closer to those in international gateway cities.
“This is the first (property) cycle we’ve seen where there’s a deregulated global market, where capital is free to flow from Asia to Australia,” Mr Moss told The Weekend Australian.
“We have a free floating dollar, equity makers are global and now our residential markets are going the same way.”
Mr Moss said Asian, particularly Chinese, investment in Australian housing by both individual investors and developers meant any levers flagged by the Reserve Bank this week to take the heat out of the investor and foreign investment fuelled Sydney and Melbourne housing markets would be limited.
In its Financial Stability Review, the RBA signalled it could restrict banks’ lending to the housing sector in a bid to ward off a housing bubble and the flow-on risks to the banking sector. The bank said it was in discussions with other Australian financial regulators to take “further steps to reinforce sound lending practices, particularly for lending to investors”.
In Sydney, house prices jumped 16.2 per cent in the year to August, while Melbourne’s prices rose 11.7 per cent, according to researcher RP Data. Canberra’s residential prices edged up only 1.4 per cent for the 12 months, Hobart rose 2.8 per cent, Perth 3.5 per cent, Brisbane 5.4 per cent and Adelaide 5.9 per cent.
A year ago, Mr Moss — who built a $23 billion real estate business before leaving Macquarie in 2007 — was a property bear, expecting house price growth to top out in relatively weak domestic economy. However, he has been rethinking his outlook.
“In Singapore, you can’t buy an investment property under $1 million,” Mr Moss said, noting that those buyers, and investors from China, Malaysia and India were now familiar with Australian residential property.
Comparing prices in Singapore and Australia was “something of an apples and oranges” exercise due to Singapore’s very small land area which limited supply, and very different tax regimes. “However, no one would argue Singapore apartments are worth more on a per square foot basis,” he said.
This sort of price gap would eventually drag Australian capital city values up and see a structural change in our housing market, he said.
To promote affordability, Mr Moss said he was not against barriers to foreign investment. “We need to be able to control it to some degree,” he said.
Last year he called on the states, particularly NSW, to levy an additional 5 per cent stamp duty on foreign investors, saying Australians could be priced out of some housing markets.
Mr Moss said issues in the housing market were better tackled at a state or local government level, with the federal government or the RBA’s macroprudential tools such as restricting how much banks could lend to investors, either less effective or likely to damage weaker parts of the market.
At a state government level, stamp duty on the purchase of a house could be imposed on a sliding scale — higher for the white-hot Sydney and Melbourne markets, he said.
“Rather than react to what’s happening, what the government needs to do is understand what is going to happen.”
Mr Moss said governments should look how to make money from the real estate bubble. He said councils which add value through rezoning land to allow apartment development should share in the developer’s profit.
That money could then be spent on infrastructure, Mr Moss said. He also tackled negative gearing saying the ultimate role of this tax was to encourage the supply of housing.
Foreign developers were creating excess supply with the rash of apartment projects in Sydney, Melbourne and Brisbane and were taking over the purpose of negative gearing. “If I was Joe Hockey, I would be jumping up and down, looking to reduce the tax benefit. Why don’t we halve it?” Mr Moss said.
Home buyers pay ‘ridiculous’ price but trust the market
THE AUSTRALIAN SEPTEMBER 27, 2014 12:00AM
Kylar Loussikian
Journalist
Sydney
Hua Ping Xu with her husband Daniel Yuen and children John Brown and Malcolm at a displayHua Ping Xu with her husband Daniel Yuen and children John Brown and Malcolm at a display suite of the property they are buying in Glebe. Source: News Limited
No property bubble according to John McGrath
DESPITE repeated warnings of a property bubble in Australia’s capital cities, homebuyers are still optimistic, snapping up houses and apartments at
near-record rates.
Sydney couple Daniel Yuen and Hua Ping Xu recently purchased a two-bedroom apartment in inner-city Sydney, and Mrs Xu said while prices were “ridiculous” she had confidence in the market.
“Honestly, my husband and I still believe the market will keep going up, we definitely think the price is too high, which means a lot of first-home buyers will struggle to afford to buy, but it is what it is,” she said.
The couple paid $885,000 for the apartment in the Mezzo development in Glebe, but haven’t decided whether they will move into the unit once it’s completed.
The 108 apartments in the complex, developed by Phillip Wolanski’s Denwol Group, put on sale last weekend, sold out in less than four hours, according to agent David Poppleton of Savills.
While buyers were taking into account talk of a property bubble, he said, they understood that strong demand and the historic lack of supply would continue to push up prices.
Mrs Xu said it was the apartment’s location that attracted them to purchase.
“It was very hard to find options in that area, and I think that even if the market goes down there is little risk in Glebe compared to other places, and location and supply is the reason,” she said.
There are 1560 auctions scheduled across Australia this week, although agents — particularly in Melbourne — advise against auctions during the AFL grand final weekend.
Why price rises won’t bring the house down
THE AUSTRALIAN SEPTEMBER 27, 2014 12:00AM
Adam Creighton
Economics Correspondent
Sydney
No property bubble according to John McGrath
What bubble?What bubble? Source: TheAustralian
No property bubble according to John McG...What bubble?
I don’t even know what a bubble means. These words have become popular. I don’t think they have any meaning ... people are always saying that (house) prices are too high. When they turn out to be right, we anoint them. When they turn out to be wrong, we ignore them.
2013 Nobel economics Laureate professor Eugene Fama
WHETHER house price bubbles exist, let alone whether they warrant a response, divides economists as much as anxious first-home buyers. Controversial Australian economist Steve Keen sold his Surry Hills flat in inner Sydney in late 2008, claiming that a borrowing binge had paved the way for house prices to plunge. Yet, after wobbling in early 2009, Sydney house prices have since surged 49 per cent.
The property bears are back, and likely to be equally wrong.
Yes, mortgage interest rates of below 5 per cent — the lowest since the 1960s — have fanned double-digit percentage gains in Australian capital city house prices over the past year. In Sydney, which makes up 40 per cent of the national market by value, the increase has been 16.5 per cent compared to 10.1 per cent nationally.
The Reserve Bank even weighed in pessimistically this week, suggesting Australia’s housing market had become “unbalanced”, and was suffering from a “speculative excess” owing to investors’ “unrealistic expectations of future price growth” — unusually strong language.
It vaguely foreshadowed introduction of new limits on loans to investors, worried that their growing presence had fuelled unsustainable price rises in parts of Sydney and Melbourne. Left unchecked, the RBA felt, falls in house prices that undermined confidence, spending, and made its goal of sustainable economic growth more difficult were more likely.
It is true investors’ share of new loan approvals is now more than 45 per cent of the total in Sydney. The monthly value of new investor loans has jumped 90 per cent in NSW and 50 per cent in Victoria over the past two years to almost $4.5 billion and $2.5bn, respectively. Meanwhile, first-home buyers’ share of new home loans has dwindled to a record low of 12 per cent. And almost two-thirds of new loans to investors are ‘‘interest only’’, compared to 31 per cent of owner-occupiers, suggesting capital gains are motivating.
But the Reserve was not suggesting any house price ‘‘bubble’’ was about to pop. Analysis by its own economists in June explicitly concluded “recent data do not show signs of a bubble”. Indeed, even in effervescent Sydney, a different picture emerges once inflation is accounted for. Over the 10 years to June 2014 — a period during which the consumer price index rose 31 per cent — real house prices increased by an annual compound average of about 1.2 per cent a year. For Melbourne, the figure is 3.8 per cent.
“The RBA is not saying we have a bubble, only that we could do — if the current dynamics continue for much longer,” says Saul Eslake, chief economist of Bank of America Merrill Lynch.
The Switzerland-based Bank for International Settlements, oblivious of local concerns, concluded in September that Australia’s overall level of real house prices had in fact fallen by about 1 per cent over the past three years. In fact, house prices in rich countries have done little spectacular since 2009, following significant ‘‘bubbles’’ in the US and Britain.
People are notoriously bad at understanding the effects of inflation. If a $600,000 house bought in 2008 had not risen to a value of at least $690,000 by 2014, it would be worth less in real terms.
“In Sydney prices are becoming a little frothy now but the national average house price to income ratio is around 4.2, only a little above 4.1, which is the average for the past decade” says Paul Bloxham, chief economist at HSBC.
Bloxham is a longstanding critic of foreign analysis, whether by International Monetary Fund or The Economist magazine, that routinely argues Australia’s house prices are unreasonably expensive.
“Sure, house price to income ratios are much higher now than for much of the period after WWII but such comparisons ignore the impact of financial deregulation, which has led to permanently lower interest rates, and the growth of double-income households,” Bloxham tells Inquirer.
“Furthermore, comparisons with other rich countries aren’t fair because housing density in Australia’s big cities is much lower than in say Singapore or New York, meaning bigger and more expensive houses make up a larger share of our sales,” he adds.
Eslake also dismisses housing bubble talk. “That requires unsustainable growth in debt and price growth that rests on self-fulfilling and irrational belief in rising prices — at the very least we don’t have the first,” he says.
While growth in credit has picked up and investors are hoovering up a rising share of it, the total value of loans to households grew only 6.5 per cent over the year to July (to $1.38 trillion), about a third as fast as it grew before the financial crisis. Meanwhile loans to businesses — the sort of lending the RBA would like to grow — grew an anaemic 3.2 per cent to $760bn.
Tim Lawless, head of research at housing analysis firm RP Data, says the risks are concentrated in particular inner-city apartment markets like Docklands and South Bank in Melbourne, and Newtown and Ultimo in Sydney, where investors own more than 50 per cent of the dwellings compared to about 33 per cent nationally.
“Gross rental yields — before rates, utilities, insurance maintenance — for detached houses have fallen to 3.2 per cent in Melbourne, the lowest since 1990,” Lawless says.
Such market realities are likely to mitigate house price growth better than heavy handed intervention. Nationally, gross rental yields have fallen steadily since 2012 to about 4 per cent (the same as a no-frills, ‘‘high interest’’ online savings account) while rents are growing more slowly than inflation. Vacancy rates have been steadily creeping up since the global financial crisis too.
Kelly O’Dwyer, who is heading a parliamentary inquiry into the impact of foreign buyers on Australian residential property, says up to 20 per cent of new apartments are purchased by foreign residents, according to big builders such as Mirvac and Australand. “But expert submissions we’ve received are divided over whether foreign demand helps locals by encouraging new supply or boosts prices because of added competition, especially for new apartments,” she adds.
Mark Steinert, managing director at Stockland, Australia’s largest diversified property developer, tells Inquirer house price growth in Sydney will probably slow to about 5 per cent. He says the NSW government is “taking very positive steps to create new housing supply, particularly in Sydney’s northwest and southwest growth centres. However, the Sydney housing market is coming off a decade of chronic undersupply.” He points to similar helpful steps in Victoria.
Whatever the case, while population growth flatlined, home building has accelerated. The rate of council approval of new houses and apartments is now at the highest level in 14 years. For most of 2014, about 6000 apartments and 9000 new houses have been approved each month.
The Reserve Bank has been at pains to emphasise Australia’s financial stability is not under threat from rising house prices. Only 0.6 per cent of banks’ housing loans are delinquent in any way, according to APRA, a share that has fallen steadily since 2010. About 2 per cent of business and personal loans are ‘‘non-performing’’.
“Australian mortgages are on average 24 months prepaid, plus they are full recourse — unlike in most US regions, where people can throw away the keys,” says Bloxham, noting banks here tended not to adjust borrowers’ repayments when interest rates fell.
Even if investors bet on house prices, would it matter? Investment loans are overwhelmingly held by better-off people. About 80 per cent of the $467bn in outstanding housing investment loans are held by the top two income quintiles (60 per cent by the top fifth). Further, loans to investors have lower loan-to-valuation ratios and investors are typically older with substantial other assets.
Demands for policymakers to ‘‘do something’’ in response to the recent house price jump are unlikely to abate. Eslake reckons the standard policy response to elevated house prices — lifting interest rates — would damage Australia’s weak non-mining economy.
“And so-called macroprudential tools are a 21st century name for 20th century regulations that were abolished decades ago,” he says, noting introducing limits on loan-to-valuation ratios would hit first-home buyers the hardest, given they tended to borrow the most. Similarly coping with resurgent house prices, New Zealand has capped at 10 per cent the share of new loans banks can issue with loan-to-valuation ratios above 80 per cent.
From next month, British banks will face limits on the number of loans they can grant with values more than 4.5 times the borrower’s income.
Key federal crossbench senator and former home builder Bob Day says government shouldn’t do anything directly to try to stop house prices rising.
“But there’s a lot they can and should do about fringe development, where there’s an infinite supply of land available and a housing industry ready, willing and able to put top-quality houses on it at unbelievably low prices,” he adds.
Eslake prefers ending negative gearing for new investors, a tax inducement he says has bid up prices and distorted the economy, noting 93 per cent of investors buy existing rather than new dwellings.
“Interest on borrowings undertaken to purchase any asset should — for assets acquired after the date of the announcement — only be deductible up to the amount of the income produced by that asset in each income year, with any excess ‘‘carried forward’’ to be offset against the capital gains tax liability when the asset is eventually sold,” he explains.
Whatever the underlying pros and cons of investing in property versus shares or bank deposits, investors’ decisions are massively skewed by the tax system. The 2010 Henry review showed the real effective marginal tax rates varied wildly for people on the top marginal tax bracket.
Recent increases in the top two marginal tax rates to 39 per cent and 49 per cent have only increased the appeal of tax-favoured investment strategies.
Housing debt outpaces income
THE AUSTRALIAN SEPTEMBER 27, 2014 12:00AM
David Uren
Economics Editor
Canberra
Greg Brown
Property Reporter
Sydney
HOUSING debt has risen to a record level as investors take advantage of record low interest rates and rising prices.
Figures from the Reserve Bank show that while households are carrying more debt than ever compared with their incomes, house prices are rising more rapidly.
The Reserve Bank estimates that the housing debt across the country is 37.1 per cent greater than total household incomes. This is up from 33.3 per cent a year ago. At the time of the last housing boom a decade ago, housing debt and the incomes were the same.
The bank has flagged it is preparing to take action to curb speculative investment in the Sydney and Melbourne property markets. Although it has not spelt out what steps it might take, analysts do not expect this will include an increase in interest rates.
The bank’s analysis of housing investment shows interest rates are consuming only 7.2 per cent of average household income, which, apart from three months in the middle of the global financial crisis, is the lowest share since 2004.
The Reserve Bank averages debt costs across the whole population, although only 37 per cent of households have a mortgage while about 12 per cent have an investment property. About 31 per cent own their home outright.
The Reserve Bank shows that housing and share investments have done well over the past year. Housing assets are 4.3 times greater than average incomes while financial assets, including shares, cash and unit trusts, are equivalent to 3.4 times earnings. Both are ahead of levels a year ago although well below the peaks reached before the financial crisis.
The International Monetary Fund estimates that housing debt has risen further, relative to income, in Australia than in any other country, except Canada and Belgium. It says this puts house prices beyond the reach of an increasing share of the population.
A report by British analysts Lombard Street Research attributes much of the rise in Australian property investment to the crackdown on corruption in China.
“The weakness in the Chinese property market over this year is in part a direct reflection of this trend as people try to get rid of illicit real estate holdings’’ sending money flooding to the likes of Australia.
Property prices = 海鲜价。no real price reference except construction costs. Even land component is relative pricing.
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"Figures from the Reserve Bank show that while households are carrying more debt than ever compared with their incomes, house prices are rising more rapidly."
I assume this is a joke. Housing bubbles are not unprecedented. People should seriously study history
Now we look at interest payments as % of income instead of mortgage payment. Deja vu
Growing out of debt from income or GDP growth which is productive is very different from non productive capital appreciation expectation.