Joe Hockey dubs housing bubble claims as "lazy analysis"

The Australian Treasurer Joe Hockey has again dismissed suggestions of an Australian housing bubble. He says prices prices have been substantial.

 “It is just an easy mantra for international commentators and for analysts based overseas to say 'well there's a housing bubble emerging in Australia," he said.

"But I don’t see at the moment, any substantial risk."

Saying rising prices were reacting to a lack of supply, Hockey told the Bloomberg seminar the claim that property buying households and investors were taking on too much debt was wrong.

“I’m not so sure it’s credit-fuelled,” he said.

“There’s a lot of cash going into property now.”

He said the recent surge in new dwelling construction – much of it the result of foreign investment – might go some way to addressing housing shortages in the country, especially in Sydney, Melbourne and Brisbane.

“Australia fundamentally doesn’t produce enough houses to meet demand,” the Treasurer said.

“It is just an easy mantra for international commentators, for analysts based overseas to say ‘well, you know, there’s a bit of a housing bubble emerging in Australia’.

“That is rather a lazy analysis, because fundamentally we don’t have enough supply to meet demand.

“That doesn’t suggest there’s a bubble; there might be a price increase of some substance, but you’d expect the market to react and produce some more housing.”

Hockey also suggested a lower Australian dollar might encourage more investment in new housing.

International investment in Australia’s housing market “may well increase” with a cooling of the Australian dollar, he said.

Hockey urged state governments to do some of the “heavy lifting” in increasing the housing supply.

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