A Reserve Bank board member is cooling fears over the rising prices of Australia’s property market.
Australian homes are amongst the most expensive in the world, with house prices rising about 11% last year – fuelling concerns that the property market might overheat.
But
RBA board member, John Edwards has told
News Corp that there is nothing to worry about, saying “It is not anything approaching a crisis.”
According to Edwards, housing credit growth, high amounts of household debt and weak income growth would cool prices.
Data released last week revealed that the value of investor loans surged 6.8% from June, lifting the yearly increase in housing credit to investors to 30%.
Despite more official
figures released last week showing the number of jobs increased by 121,000 in August, Edwards maintains that job creation in Australia is relatively weak overall, which will also drive down property prices.
“The number on job creation, you wouldn’t expect that to be sustained. It is extraordinarily high,” he told News Corp.
His comments come after Reserve Bank governor, Glenn Stevens expressed concern over the low-interest environment having the potential to create a housing bubble.
“In our efforts to stimulate growth in the real economy, we don't want to foster too much build-up of risk in the financial sector, such that people are over-extended. That could leave the economy exposed to nasty shocks in the future,” he said.
