Further moderation in home price growth: Shane Oliver
GUEST OBSERVER
ABS data showed a further moderation in home price growth over the year to the June quarter to 4.1 percent, but June quarter growth was 2 percent plus (or 8 percent plus on annualised basis) in Sydney and Melbourne which indicates these cities remain too hot.
A surge in auction clearance rates suggests they may have become even hotter lately.
There is not much the RBA can do, but it is an issue for APRA to keep an eye on.
Meanwhile, Australia’s population popped 24 million in the March quarter. While population growth has slowed to 1.4 percent year-on-year from a peak of 2.1 percent in 2008, it appears to have stabilised, remains strong compared to most other advanced countries, will help drive reasonable potential economic growth and continues to underpin long term housing demand.
SHANE OLIVER is head of investment strategy and economics and chief economist at AMP Capital and is responsible for AMP Capital's diversified investment funds.