Newspaper article Coffs Coast Advocate (Coffs Harbour, Australia)

Bricks and Mortar Are Still in Demand

Newspaper article Coffs Coast Advocate (Coffs Harbour, Australia)

Bricks and Mortar Are Still in Demand

Article excerpt

WHILE the ratio of house prices to income has risen over the past decade, it has eased to below pre-GFC levels, according to the Housing Industry Association (HIA), the voice of Australia's residential building industry.

HIA Economics found that as of September 2010, Australia's house price to household income ratio was 4.1.

"In terms of the capital cities, the ratio is 4.2, while in Regional Australia the ratio is 4.1, which is in contrast to claims from some quarters that the ratio is more like six or seven," said HIA's senior economist Andrew Harvey.

The International Monetary Fund (IMF) last week slashed its earlier view that Australian houses were overvalued by 25 per cent, and while stating that prices could be five to 10 per cent higher than market value, it signalled that the Australian housing market will continue to be supported by fundamentals including strong population growth and high real incomes.

"HIA's work on underlying demand indicates that Australia continues to run large annual deficits between the underlying demand for dwellings and the completion of dwellings, so in the longer term Australia's housing market is underpinned by the immutable forces of insufficient supply and robust underlying demand. …

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