Eight quotes from the RBA about Australia’s property market

Here are eight recent quotes from the Reserve Bank of Australia (RBA) made in reference to the Australian property market:

1. "Prices have risen faster than consumer prices, but they have not risen materially faster than household incomes… This is not a country where we haven't experienced house price falls; we have experienced house price falls. There is risk in the system that people have already experienced. It's simply incorrect to treat the Australian history as if there had never been any kind of downturn."
   October, RBA head of financial stability, Luci Ellis, at the AHURI panel roundtable
   
   
2. "Australia is not one of the boomier places over the last 10 years. Prices have risen faster than consumer prices, but they have not risen materially faster than household incomes in Australia… Mortgage repayments are lower than the average of the past 10 or 15 years, so again thinking about what it means to have affordability and unaffordability – the affordability of a current mortgage is not unusually high at present."
   October, RBA head of financial stability, Luci Ellis, at the AHURI panel roundtable
   
   
3. "Apartment construction in the inner city [in particular Melbourne, Sydney] has been at high levels for some time and, given the time lags in completing higher density constructions, is expected to remain elevated for the next few years. That said, liaison suggests that construction in Melbourne continues to be driven by strong demand, including from foreign investors, with pre-sale levels remaining high."
   September, RBA Financial Stability Review
   
   
4. "A related risk, which is likely to be currently most pronounced in Melbourne, is that some new developments may appeal to a relatively narrow segment of tenant or owner demand. For example, some new developments involve smaller-sized apartments that are targeted at international students, which could be harder to sell in the secondary market than more traditional-sized apartments. This could place downward pressure on apartment prices if student demand weakens or if there are other shocks that reduce foreign investors’ appetite for these apartments."
   September, RBA Financial Stability Review
   
   
5. "Dwelling investment had increased by more than 8% over the year to the June quarter, and continued strength in building approvals and other indicators pointed to further growth in coming quarters. House price growth had been a little slower, on average, over 2014 than in late 2013, but remained consistent with strong conditions in the established housing market."
   October RBA board minutes
   
   
6. "What matters is how much speculation there is in the market and what that might mean for a subsequent price cycle, and at the moment there is more speculative activity than we are comfortable with."
   October, RBA head of financial stability, Luci Ellis, Senate Inquiry into housing affordability
   
   
7. "Some of this [growth seen in the property markets, such as Sydney] perhaps represented an element of catch up after some earlier weakness. Nonetheless, prices have continued to rise significantly faster than incomes, and this has been associated with strong growth in investor activity."
   October, RBA assistant governor Malcolm Edey, Senate Inquiry into housing affordability
   
   
8. "The general point I would make is that we can't improve housing affordability simply by adding to demand. Targeted assistance can certainly help particular groups such as first home buyers, but without a supply-side response, any generalised increase in demand will just be capitalised into prices."
   October, RBA assistant governor Malcolm Edey, Senate Inquiry into housing affordability