This was published 11 years ago
RBA reassures on housing market
By Peter Martin
THERE is no danger of a collapse in Australia's housing market. Indeed, if anything the market is undersupplied, according to assistant Reserve Bank governor Guy Debelle.
Dr Debelle told a mortgage conference in Adelaide the only signs of oversupply were in south-east Queensland. For the nation as a whole there weren't enough houses to go around. ''Nationally the level of housing construction is about where it was 10 years ago, but the population is 15 per cent higher,'' he told the conference. ''In that sense there is no overbuilding. People point to the level of debt, and it is rather high, but we don't see any problem with the households who have borrowed servicing the debt.
''It tends to be held by the upper end of the income distribution. There are not a whole lot of first home buyers out there gearing up heavily.''
Home loan arrears have been ''basically going sideways'' for 18 months.
While a collapse in the Australia's housing market is not something that keeps the Reserve Bank ''awake at night'' there is a ''day of reckoning'' coming for the European Union and nobody knows how it will play out.
The Economist magazine recently found Australian home prices among the most overvalued in the world on the basis of mismatch between rent and home prices.
Dr Debelle told the conference such claims were more a sign of economists in search of a headline than a reflection of reality.