http://www.news.com.au/couriermail/story/0,23739,22402229-952,00.html
In a bleak message for future home buyers, BIS Shrapnel chief economist Frank Gelber said present prices were as affordable as housing was going to get.
"There's a housing boom coming, is what I'm really saying," Dr Gelber told yesterday's BIS Shrapnel Economic Outlook conference in Brisbane.
"It's going to take something like a 30 to 40 per cent rise in housing prices across the board in order to encourage enough of that land to be brought on to satisfy the 'greedy' developers and landowners.
Dr Gelber said the housing market was "collateral damage" in the Reserve Bank of Australia's war on inflation through interest rate rises.
The dilemma for the RBA would be to recognise the "tipping point" at which further rate rises would shatter household confidence, Dr Gelber told investors.
Basically he's saying that structural issues are going to push up prices, but at the same time buyer confidence is going to be crap? How does one reconcile that? I can't. Prices rise when people are willing and able to borrow. They fall when people are not willing or unable to borrow. I would have thought the structural-driven undersupply would increase rents instead as prices come off the boil.
Either way, those who own property aren't complaining. Higher rents but flat or lower prices in the short term, then a medium term boom.
Alex
In a bleak message for future home buyers, BIS Shrapnel chief economist Frank Gelber said present prices were as affordable as housing was going to get.
"There's a housing boom coming, is what I'm really saying," Dr Gelber told yesterday's BIS Shrapnel Economic Outlook conference in Brisbane.
"It's going to take something like a 30 to 40 per cent rise in housing prices across the board in order to encourage enough of that land to be brought on to satisfy the 'greedy' developers and landowners.
Dr Gelber said the housing market was "collateral damage" in the Reserve Bank of Australia's war on inflation through interest rate rises.
The dilemma for the RBA would be to recognise the "tipping point" at which further rate rises would shatter household confidence, Dr Gelber told investors.
Basically he's saying that structural issues are going to push up prices, but at the same time buyer confidence is going to be crap? How does one reconcile that? I can't. Prices rise when people are willing and able to borrow. They fall when people are not willing or unable to borrow. I would have thought the structural-driven undersupply would increase rents instead as prices come off the boil.
Either way, those who own property aren't complaining. Higher rents but flat or lower prices in the short term, then a medium term boom.
Alex