From ABC 24 this morning
ELEANOR HALL: The Federal Treasurer has rebuffed suggestions of a property bubble in Australia.
Joe Hockey told a business forum in Sydney that Australian house prices have surged because there's not enough supply to meet demand.
A senior Reserve Bank official at the same event was careful not to use the word "bubble".
But in the latest minutes of the RBA board meeting, members warned that more speculation on housing could increase the likelihood of a property market correction.
Business reporter, Sue Lannin.
SUE LANNIN: It's the B-word that no one wants to say.
On the question of whether the big rise in house prices over the past year is a housing bubble that could lead to a crash, the Federal Treasurer digressed at a business function in Sydney.
JOE HOCKEY: That is a rather lazy analysis because, fundamentally, we don't have enough supply to meet demand and that doesn't suggest there's a bubble.
There might be a price increase of some substance, but you would expect the market to react by producing more housing.
Now, state governments have got to do some of the heavy lifting here.
SUE LANNIN: Joe Hockey was speaking to the Bloomberg Summit in Sydney ahead of the G20 finance ministers meeting in Cairns this weekend.
Sydney and Melbourne are the hottest property markets as cashed up investors buy up big.
Both the International Monetary Fund and the Bank for International Settlements have said that Australian housing is overvalued.
But, also careful not to use the word bubble at the summit, was assistant Reserve Bank governor, Christopher Kent.
He was asked if the RBA would raise interest rates to curb the animal spirits in the housing market.
CHRISTOPHER KENT: We look at a wide range of things to think about the strength of any given market, and in the housing market it certainly is showing signs of some renewed strength in house prices growth of late, and auction clearance rates.
Much of that strength is in Sydney and Melbourne and much of it's in the investment market.
We're also seeing more supply coming forth. We're seeing building approvals at elevated levels; we're seeing dwelling investment picking up.
So monetary policy I think is working, and we've been at great pains to always tell people when you're making investment decisions, make them with great care, don't assume the prices can always and always will go up.
ELEANOR HALL: The Federal Treasurer has rebuffed suggestions of a property bubble in Australia.
Joe Hockey told a business forum in Sydney that Australian house prices have surged because there's not enough supply to meet demand.
A senior Reserve Bank official at the same event was careful not to use the word "bubble".
But in the latest minutes of the RBA board meeting, members warned that more speculation on housing could increase the likelihood of a property market correction.
Business reporter, Sue Lannin.
SUE LANNIN: It's the B-word that no one wants to say.
On the question of whether the big rise in house prices over the past year is a housing bubble that could lead to a crash, the Federal Treasurer digressed at a business function in Sydney.
JOE HOCKEY: That is a rather lazy analysis because, fundamentally, we don't have enough supply to meet demand and that doesn't suggest there's a bubble.
There might be a price increase of some substance, but you would expect the market to react by producing more housing.
Now, state governments have got to do some of the heavy lifting here.
SUE LANNIN: Joe Hockey was speaking to the Bloomberg Summit in Sydney ahead of the G20 finance ministers meeting in Cairns this weekend.
Sydney and Melbourne are the hottest property markets as cashed up investors buy up big.
Both the International Monetary Fund and the Bank for International Settlements have said that Australian housing is overvalued.
But, also careful not to use the word bubble at the summit, was assistant Reserve Bank governor, Christopher Kent.
He was asked if the RBA would raise interest rates to curb the animal spirits in the housing market.
CHRISTOPHER KENT: We look at a wide range of things to think about the strength of any given market, and in the housing market it certainly is showing signs of some renewed strength in house prices growth of late, and auction clearance rates.
Much of that strength is in Sydney and Melbourne and much of it's in the investment market.
We're also seeing more supply coming forth. We're seeing building approvals at elevated levels; we're seeing dwelling investment picking up.
So monetary policy I think is working, and we've been at great pains to always tell people when you're making investment decisions, make them with great care, don't assume the prices can always and always will go up.
