Courtesy of Mish.
“No Risk of Housing Bust”
In case you need some humor today, please consider No risk of housing bust: RBA
Australia is not at danger of a collapse in the housing market, a top central banker says, again playing down concerns that Australia could suffer price falls like those seen in the United States or parts of Europe.
Speaking at a mortgage conference, Reserve Bank assistant governor Guy Debelle said he was more concerned about the outlook for the European Union and the uncertainty that was causing globally.
Asked about fears of a housing collapse in Australia, Mr Debelle said there was no oversupply of housing in the country, households were well able to manage their debt levels and mortgage arrears remained very low.
“This (housing risk) is not something that keeps me awake at night,” he added.
No Oversupply?
For years I have had people emailing me that a housing bust was impossible because there was a critical shortage of houses in Australia.
I calmly point out we heard the same story in the US for years as well. Of course, in the midst of a bubble, no one wants to hear any rational explanations.
Thus, a few days ago I had to laugh at this Bloomberg headline: Vanishing Households Undercut Claim of Australia Shortage
Australia has almost 1 million fewer households than assumed in government forecasts of a housing shortage, raising doubts about a supply shortfall cited as the main reason the nation will avoid a U.S.-style crash.
The Pacific nation had 7.8 million households, data released yesterday from the 2011 Census showed. That compared with estimates of 8.7 million as of June 2010, according to the latest figures used by the National Housing Supply Council, a group created by the government in May 2008 to monitor housing demand, supply and affordability. Australia’s population also grew by 300,000 less than previously estimated, to 21.5 million.
“There’s been a bit of a disconnect between the estimates between the census points and the actual census data,” said David Cannington, Melbourne-based economist at Australia & New Zealand Banking Group Ltd. (ANZ) “My feeling is that some of the underlying housing demand numbers will be revised down.”
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