Analysis or scaremongers

Friday, July 30, 2010

Charles L King and Co First National real estate principal Gary Wood is calling for scaremongering real estate analysts to be held accountable, after predicting a `housing bubble burst' or `affordability crisis', amid claims Australia has the most overpriced property in the world.

``These types of claims are incredibly frustrating when you know they are based on a lack of understanding of the complexities and dynamics of the Australian property market,'' Mr Wood said.

``The reality is that we probably have one of the best buyers' markets at the moment and houses at some of the most affordable levels in decades. Strong population growth is driving demand, and a crucial undersupply of stock is putting a floor under house prices.''

According to Mr Wood, the market was already softening, with the slowing of house price increases creating opportunities for bargain hunters, first time buyers and investors.

While it was true immigration levels, were generating significant demand for housing, much of the debate was overheated by the political agenda.

``But what no one is talking about is the fact that government is one of the major barriers to increasing supply of housing,'' Mr Wood said.

``Ineffectual planning and approvals processes are the major barriers to increasing supply, so it is governments that will continue to drive the market into the future.

``Compounding all this is the Prime Minister's comments that she no longer supports a Big Australia, but a Sustainable Australia, which can only beg the question does that mean you are going to lower immigration levels, which would impact significantly on the Australian property market.

``When it comes to price trends, they correlate more with the level of public confidence than the level of interest rates, which can have a positive influence on confidence as they are a sign of an improving economy.''