Slight uptick but no looming price bubble: SQM's Louis Christopher

SQM Research director Louis Christopher says despite recent price increases there is no price bubble to worry about.

“No sooner has a housing recovery been confirmed, than the loud voices go straight to assuming we have a looming property bubble on our hands,” Christopher noted.

“The voices seem to range from those who have no experience or qualifications to speak on this sector through to those who should know a lot better.

He says most capital cities are just experiencing a modest recovery rather than displaying any kind of boom conditions.

“It is just Sydney, Perth and Darwin that have been recording more rapid price rises.”

“If we were to see national housing prices sustaining annualised increases of 7% plus for a considerable period then that is something to watch for. However, it just simply isn’t happening yet.”

“There is no doubt in my mind that interest rates are helping the recovery along and there is also no doubt in my mind that the RBA will look at the national result rather than just what is happening in the Sydney housing market.”

SQM has recently launched a vendor sentiment index which shows vendor asking prices on capital city houses are up 3.7% for the year to $667,100. They are up 0.7% for the month but down 1.7% for the week.

Sydney had the most pronounced weekly change in vendor asking prices, up 4.2% to $898,400 and 7.8% for the year.

Melbourne vendor asking prices for houses are up virtually unchanged for the year, but up 1.4% in the past week.

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Alistair Walsh

Alistair Walsh

Deutsche Welle online reporter

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