Real estate industry only has itself to blame for holding back first-home buyers

Posted on September 18, 2013 by | 0 Comments

What will it take for the real estate industry to be satisfied?

It’s doubtful there’s been a time in the past 10 years when the industry has had it this good.

Interest rates at historic lows, sales volumes rising, housing finance increasing month by month, building approvals trending strongly upwards, grants and stamp duty concessions to people building new homes, affordability the best it’s been since 2003 and confidence rising – it’s an almost perfect set of parameters for service providers to make money.

But the industry is still complaining. I say that with a sense of disbelief that a sector with so much in its favour still thinks it has legitimate complaints.

The welfare mentality in the industry borders on the pathetic.

I didn’t think anyone could challenge the Housing Industry Association as the greatest malcontents in real estate, but the Real Estate Institute of Australia is giving it a good try.

Interest rates are the best they’ve ever been but the REIA is demanding more cuts from the Reserve Bank.

There are a couple of issues I have with that. One is that the boffins at the institute clearly think interest rates are the dominant influence on property markets. All the available research contradicts that notion. Rates are a factor, but only one of many. There have been many periods in the past 50 years when markets have thrived in a high rates environment and others where low rates have failed to stimulate activity.

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