Make Australian housing more affordable by limiting the return of immigration: Shane Oliver
One of the best ways to make Australian housing more affordable was to limit the return of immigration, according to AMP Capital chief economist Shane Oliver. It would enable housing oversupply to build up, he suggested. Oliver also suggested it was important to encourage people to relocate from expensive inner-city areas to more affordable suburbs, cities and regional centres. "Don’t expect the RBA to hike rates just because the housing market is hot," he said. "The RBA does not target house prices (and nor should it) and will use macro prudential controls to control lending if it looks like lending standards are getting too lax. "In our view, this is likely from later this year and could include a return to speed limits on investor loan growth and limits around loan to value ratios, debt to income ratios and interest servicing to income. "The best ways to make Australian housing more affordable are to limit the return of immigration to enable housing oversupply to build up and to reinforce the pandemic in encouraging people to relocate from expensive inner-city areas to more affordable suburbs, cities and regional centres," Oliver said. He forecasts Australian home prices are likely to rise another 5% to 10% this year and next being boosted by record low mortgage rates, government home buyer incentives and the recovery in the jobs market but the stop to immigration and weak rental markets will likely weigh on inner city areas and units in Melbourne and Sydney. "Outer suburbs, houses, smaller cities and regional areas will see relatively stronger gains in 2021," he said.