Finance - Bubble

Reserve Bank faces rates headache amid concerns of house price bubble

Posted on October 3, 2013 by | 0 Comments
While the Reserve Bank (RBA) has left the official cash rate at a historic low, some economists believe interest rates must fall in the months ahead to restrain the value of the dollar and encourage recovery in non-mining sectors of the economy. The growing headache for the RBA is the lower the rates, the greater the boom in the housing market – and bigger the pressure for regulators to intervene and ensure house price inflation...

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Property and shares go head to head

Posted on September 26, 2013 by | 0 Comments
It has to be one for the books when a real estate agent is saying property prices are becoming unsustainable and a Reserve Bank heavy says they’re not. Yet I heard both the same day. And no, I didn’t mix the quotes up, though context can be an elusive thing. The agent was commenting on research suggesting Sydney values could jump by up to 20 per cent next year, while the Reserve’s assistant governor was...

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Gen Y is the most upbeat about property prices, and first-home buyers are ready for a comeback

Posted on September 26, 2013 by | 0 Comments
QUEENSLANDERS are more positive about housing affordability than anywhere else in Australia, with Generation Y the most upbeat of all when it comes to property prices, according to new research. The annual realestate.com.au Housing Affordability Sentiment Index (HASI), which tracks the sentiments of Australians towards the cost of housing, reveals that all states and generations have a brighter outlook on property prices in general than 12 months ago. This is despite statistics based on the...

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What is a property bubble anyway?

Posted on September 21, 2013 by | 0 Comments
The Australian property bubble is speculation that real estate prices in Australia may (currently) be overvalued. This may be a real estate bubble. The bubble has been driven mostly by housing within Australia becoming investment tools instead of necessities. This was driven by the powerful real estate lobby, who heavily lobbied Paul Keating, John Howard and multiple other Australian prime ministers. Some experts, including Treasury officials,[1] believe the Australian property market is a significant bubble. It is arguably the biggest property bubble in...

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Regulators should target loan serviceability to head off trouble

Posted on September 21, 2013 by | 0 Comments
ALMOST out of nowhere, it seems, international regulators are not just talking about macroprudential controls over bank lending but introducing them. There is now mounting pressure on the Australian Prudential Regulation Authority to follow suit. Despite the host of new regulatory requirements imposing higher capital requirements, leverage ratios, tougher liquidity rules and the like since the global financial crisis, there is a significant push on for another layer of regulation. In New Zealand, Norway, Sweden,...

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Bursting the bubble myth

Posted on September 21, 2013 by | 0 Comments
INVESTING in property is a no-brainer at the moment. Prices have bottomed, auction clearance rates are on fire, especially in Sydney, and you can get a fixed rate mortgage for 4.8 per cent with 100 per cent gearing, 70 per cent in your super fund. And the experts are now saying there’ll be another housing bubble. What could be better? There’s no sign of a housing bubble yet: values are only just back to where...

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Stick to the facts in property market

Posted on September 21, 2013 by | 0 Comments
It seems the world is hitting the panic button that a property bubble is forming that if left to its own devices could wreak devastation on an already fragile global economy. In Australia the regulators are making headlines with warnings to the banks not to be lax with their lending requirements, along with comments in The Australian Financial Review by former Reserve Bank board member Bob Gregory that a property bubble ”just seems to be inevitable”. It...

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Reserve Bank assistant governor Malcolm Edey talks down risk of property bubble emerging in Australia

Posted on September 20, 2013 by | 0 Comments
The Reserve Bank has cautioned against “unrealistic alarmism” about a possible property bubble in Australia, a day after it offered a muted warning to banks about prudent lending standards. RBA assistant governor Malcolm Edey has told a conference in Sydney that the central bank is keeping a close watch on house prices, which he said were growing at an above-average pace. However Mr Edey believes it is wrong to call the rise a bubble. “We...

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Reserve Bank warns on property price bubble

Posted on September 20, 2013 by | 0 Comments
ELEANOR HALL: The Reserve Bank board today joined global financial authorities in issuing a warning about low interest rates having the potential to fuel a property price bubble. In the minutes from its September meeting, the central bank mirrored today’s IMF warning and last week’s caution from the local regulator APRA that banks need to be vigilant about their lending standards. The RBA has also warned about potentially risky property investments in self-managed superannuation funds....

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