Despite talk of a housing price bubble, ANZ research shows there is little chance of a housing market crash this year. The bank forecasts prices to remain on hold or fall slightly, but not crash.<\/p>\n
In its recent property market assessment, ANZ argues that gains in house prices have been driven by lower interest rates and an increase in household income.<\/p>\n
The ANZ ‘Australian Housing Chart Book’ reports: “A combination of lower interest rates, falling house prices and rising household incomes has improved Australian house purchase affordability over the past 12 months.”<\/p>\n
“Despite the continued concerns about significant Australian house price overvaluation from some commentators, housing market fundamentals remain supportive.”<\/p>\n
This is backed up by ANZ compiled data on international house prices, rental yields and house price-to-income ratio comparisons – showing Australian house prices have not deviated from international trends.<\/p>\n
HSBC Bank chief economist Paul Bloxham agrees that there is little to fear from a price bubble. In the recent HSBC global research report ‘Australia in 2012’, he states there are three main reasons why prices won’t plummet: the majority of houses can service their debt; the undersupply of housing is growing at a greater rate than the decline in population growth; and there is strong demand for housing close to major urban centres.<\/p>\n
“We remain unconcerned about the possibility of a large decline in housing prices this year,” concludes Bloxham.<\/p>\n