RBA : No housing bubble in Australia #2

June 15, 2010 admin Australian Economy, Australian Housing 6

RBA deputy governor Ric Battellino has today downplayed the housing bubble saying house prices in Australia, relative to income, was reasonable.

In his speech today, Mr Battellino said ‘‘People feel that house prices in Australia are quite high and that’s quite often because the ratio of house prices to income that are published for Australia tend to focus mainly on prices in the cities, and they are quite elevated,’’ ‘‘But, if you look across the whole country, the ratio of house prices to income is not that different from most other countries.’’

This comes after comments this time last month from Ms Luci Ellis, Head of Financial Stability Department for the RBA who said “Recent data suggest that we do not have a credit-fuelled speculative boom on our hands”

Last week, a report into the Irish banking crisis found the Irish central bank deliberately left out data in a crucial report forecasting a crash in the property market months before the collapse of their bubble in 2007.

In October 2005, now present U.S. Federal Reserve Chairman Ben Bernanke told congress he didn’t believe there was a housing bubble in the U.S. shortly before the market crashed.

» No house price bubble: RBA – The Sydney Morning Herald, 15th June 2010.

» Central Bank hid property crash forecast – Independent.ie – Sunday June 13th 2010.

» Bernanke: There’s No Housing Bubble to Go Bust – The Washington Post, Thursday, October 27, 2005.




6 Comments

  1. Did I miss something over the last 2 years??????

    “But, if you look across the whole country, the ratio of house prices to income is not that different from most other countries.

  2. Echos of what was being said in the US up to 2006. Nothing to see here people, keep moving.

  3. Incredible to see that house prices in Australia are floating at their near highs of 2008. Australian home prices are overvalued by upto 80-90%. You’ve got to be cuckoo to think that housing in Darwin costs more than a home in New York or London. The Australian economy is levitating on the uber bubble in China and the perception that reflation by the central Wankers will work. This is all going to end in tears and a massive contraction in the global economy. Australia has decades of pain ahead as does the rest of the world.

  4. VK,

    I agree with you how can anyone ever expect that going into more debt will fix the worlds debt problems! What a joke.

  5. basically I agree with you but its a bit unfair as nomatter what he says or dont say it can be interpreted anyway you want.

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