Here is the latest from Bloxo at HSBC. It’s a marvel of calm confidence, faith in authority, houses and the miracle economy. If I had this confidence, I’d be headlining Led Zeppelin:
Australia’s housing price boom continues. But, just because prices are rising, does not mean there is a bubble. Indeed, the recent increase in prices is roughly in line with what should be expected, given that mortgage rates are at 50 year lows. It is also largely by design, with the RBA seeking to rebalance growth, partly by lifting the housing market. More importantly, credit growth has, so far, been only modest. If there was one lesson from the global financial crisis and its forebears, it is that: it’s the leverage that matters! Nonetheless, interest rates may soon have to rise, to prevent excess exuberance entering the market.
