1 in 2 experts say recent house price growth is “unsustainable”: Finder
Australia’s housing market is experiencing a peak growth rate, but experts say the current boom won’t last forever.
In this month’s Finder RBA Cash Rate Survey™, 40 experts and economists weighed in on future cash rate moves and other issues relating to the state of the economy.
While all experts surveyed predict the cash rate to hold, nearly half of those who weighed in on property prices (47%, 16/34) believe Australia’s current house price growth is unsustainable.
Property market growth surged at its fastest rate in 33 years in March, with national dwelling values also increasing by 6.2% over the past year according to CoreLogic.
Graham Cooke, head of consumer research at Finder, said that some experts are concerned a housing bubble is emerging.
“Rock-bottom rates, government stimulus and a fear of missing out have really lit a fire under the belly of the market."
“Listing numbers are unable to meet high buyer demand, keeping inventory levels low overall and adding to the sense of urgency among buyers. "
“We’ve seen more borrowed for housing over the last six months than during any similar period in history – and economists have tipped us to borrow more over the next six."
“It’s unlikely we'll see any regulatory intervention from policymakers yet, but this might be a possibility down the track,” Cooke said.
According to Mala Raghavan of the University of Tasmania, buyers may put themselves at risk by acting too hastily.
“The recent uptick in buying behaviour largely appears to be due to the fear of missing out, and many buyers are rushing into the market without clear foresight of the impending risks."
“When mortgage rates start rising, many households will risk being unable to service their loans, and could be vulnerable to foreclosures,” she said.