Treasury Secretary John Fraser says Sydney's housing market is
showing "unequivocal" signs of a housing bubble, as are up-market areas
of Melbourne.
He has pointed to the proliferation of television home renovation shows, saying they are a sign of the way in which low interest rates are affecting Australia's culture.
"It does worry me that the historically-low level of interest rates are encouraging people to perhaps over-invest in housing," he said.
"I'm not talking just about buying housing, I'm talking about investing in housing. You've just gotta see a plethora of these renovation shows to realise something's amiss," he said.
Mr Fraser said the major drivers of the housing bubble were low interest rates and easy access to finance, saying he was concerned about the amount of money being poured into the housing market with rates so low.
But the evidence of a housing bubble in the rest of Australia was not strong, he said.
It is the strongest line Treasury has taken on the question of housing bubbles.
Mr Fraser says it is "rightly" getting a lot of attention and is occupying the interest of the Reserve Bank and the Australian Prudential Regulation Authority.
He said the level of negative gearing in Australia was so popular because of the level of personal income tax, rather than the low level of interest rates and easy access to finance.
Jenny Wikinson, Deputy Secretary of Treasury's macroeconomic group, said the macro-prudential measures announced at the end of last year, and which are being applied by APRA to try to curb overinvestment in housing, are "predominantly focusing on the investor component on housing."
Elite Wealth Creators have been involved in the property and finance industry for over 20 years. Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
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He has pointed to the proliferation of television home renovation shows, saying they are a sign of the way in which low interest rates are affecting Australia's culture.
Former contestants on The Block are pitted against renovators from the first season of House Rules in Reno
"When you look at the housing price bubble evidence, it's
unequivocally the case in Sydney, unequivocal," Mr Fraser told senators
on Monday, at an estimates hearing.
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"It's certainly the case in the higher priced areas of Melbourne, and I base that on my own observation [as well as the data].""It does worry me that the historically-low level of interest rates are encouraging people to perhaps over-invest in housing," he said.
"I'm not talking just about buying housing, I'm talking about investing in housing. You've just gotta see a plethora of these renovation shows to realise something's amiss," he said.
Mr Fraser said the major drivers of the housing bubble were low interest rates and easy access to finance, saying he was concerned about the amount of money being poured into the housing market with rates so low.
But the evidence of a housing bubble in the rest of Australia was not strong, he said.
It is the strongest line Treasury has taken on the question of housing bubbles.
Mr Fraser says it is "rightly" getting a lot of attention and is occupying the interest of the Reserve Bank and the Australian Prudential Regulation Authority.
He said the level of negative gearing in Australia was so popular because of the level of personal income tax, rather than the low level of interest rates and easy access to finance.
Jenny Wikinson, Deputy Secretary of Treasury's macroeconomic group, said the macro-prudential measures announced at the end of last year, and which are being applied by APRA to try to curb overinvestment in housing, are "predominantly focusing on the investor component on housing."
Elite Wealth Creators have been involved in the property and finance industry for over 20 years. Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance
http://www.
sales@elitewealthcreators.com
1800 GO ELITE
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