NEWS
An undersupply in the Australian property market will force residential property prices up by 30%, according to a BIS Shrapnel chief economist.
“At the end of the day, we haven't got a bubble in our residential market. We're undersupplied, not oversupplied … House prices will go up another 30 per cent over the next three years.”
He also predicted that banks would continue to restrict lending to commercial developers, which in turn would double commercial rents.
According to chief economist the global financial crisis limited risks in the market.
“We’re not over-geared, we’re not overvalued and we’re not oversupplied,” he said. ''I can't remember in the last 30 years a time when I have been more comfortable and optimistic about investment in the market.''
Australia’s recovery would not be affected by global economic uncertainty, he added.
''In our long-term forecast report … we've got cash rates going up another two percentage points over the next three years and housing interest rates above 9% and that may turn out to be moderate.”
Source: International Business Times
Published: 28 July 2010