Century 21, the largest real estate sales organisation in the Asia Pacific region, believes that it is unlikely that the Australian residential market is in, or developing, a housing bubble.
“Recent growth in national dwelling values could more be seen as a correction rather than a bubble,” said Chairman and Owner of Century 21 Australasia, Charles Tarbey.
“While property values nationally have grown by 8.7 per cent since June 2012, commentators often overlook the fact that values have dropped in several regions recently, and sit only 0.7 per cent higher than their October 2010 peak.”
According to Century 21 Australasia, the Australian market has a number of unique characteristics and drivers that by and large keep the market safe, resilient and strong.
“Projected shortages in housing stock, a stable government, a strong economy, centralised society, coastal living, and the fact that Australians tend to live in larger houses than other people around the world – are all factors that bode well for resilient ongoing house prices,” continued Charles Tarbey.
Last month the Reserve Bank’s Assistant Governor, Dr Malcolm Edey, described talk of a housing bubble as ‘‘unrealistically alarmist.”
While a projected shortage of housing stock in certain areas means that prices are likely to grow with demand, Century 21 Australasia believes that developers will also be working to capitalise on this shortage by developing more housing.
“While dwelling value growth and a low interest rate environment has started to encourage activity, Century 21 believes that any bubble talk is premature at best and alarmist at worst,” concluded Charles Tarbey.