It may pay to apply for an investment home loan now - BTFG Chief Economist Chris Caton
It may pay to apply for an investment home loan now - BTFG Chief Economist Chris Caton. House prices have risen rapidly in the past year, leading many analysts to conclude we have a bubble. My view remains there is no bubble, and concerns about prices come from over-interpretation of recent RBA rhetoric aimed at talking down the housing market and the Australian dollar. Despite recent double-digit increases, on average we've seen house prices increase just 4.7% over 10 years overall (if there is a bubble to be found anywhere it is in Darwin and Perth). The RBA holds particular concern about the strength of investor activity in Sydney and Melbourne, pointing out investor housing loan approvals have risen by about 90% in Sydney in the past two years and by more than 50% in Melbourne. The easiest way to cool a housing market is to raise interest rates, but neither the growth nor inflation outlook suggest the need for higher rates. The RBA has raised possibility of macro-prudential measures - will these happen (or work)? Find out here (VIEW LINK)
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