Interesting article, it seems that the RBA is trying to turn things around one step at a time. Change the Australian delusion that money can be made from housing no matter when or where you buy...
Investors could create housing bubble: RBA
Investors could create housing bubble: RBA
Investors buying rental properties on the proviso of capital growth could create a housing bubble which would lead to problems, a central bank official says.
Reserve Bank head of financial stability Luci Ellis, in an address to a CPA Australia conference in Brisbane, said lower rental yield will mean there is a limit on how far house prices can go.
Asked if the lower yields meant a limit to the rate of price appreciation, Dr Ellis said: "The short and simple answer is - yes".
"If rental yields are very low, investors are buying properties without really thinking abut the rental yield," Dr Ellis said.
"Buying an asset just because you are expecting the price to rise in the future, well that is actually the academic definition of a bubble.
"So that would be undesirable and be seen as a problem."