Property bubble unlikely as Sydney records strongest capital growth for housing last quarter: John Edwards

John Edwards, chief executive of Residex, says a property bubble in Australia is unlikely.

“While there is a lot of talk about the market taking off and suggestions that we are about to experience another price bubble there is little evidence to support this,” Edwards wrote on his blog on Friday.

“A more accurate statement would be that while the market remains fragile, it looks as though it is moving to a more normal growth phase."

“A period of excessive price growth is unlikely as the economy is not strong enough to support such an outcome. We are also likely to see increases in unemployment, which will also encourage a level of conservatism within the community. Additionally, interest rates will rise from the current historical low point.”

He says housing affordability is still difficult for some people but it is better than it has been for many years.

He says the property markets are rebounding on the back of lower interest rates and a lack of available stock.

Residex found that in the last quarter, house and land values have increased by 0.59% across Australia while units increased 1.89%.

It found some capital cities had very strong results in May and June but reverted to a price reversal in July.