Good news for homeowners

According to economists from investment bank UBS, low interest rates and population growth will lead to a slow growth in housing prices, rather than a drop or a crash.

This is good news for homeowners, as it means the predicted ‘top’ in April this year may no longer apply.

UBS noted a drop in dwelling unit commencements (19 per cent) and building approvals (20 per cent in May) and a sharp fall in approvals for high-rise units.

Annual building commencements will fall from about 202,000 to 195,000 next year and 188,000 in 2018.

This slowdown in the apartment sector and housing construction in general should mean that the value of existing dwellings will rise slowly rather than fall. 

Deloitte Access Economics has backed the UBS economists noting that a slower pace of home building could lead to a potential economic headwind.

“The pace of home building is set to shrink further amid increasing evidence that gravity may soon start to catch up with stupidity in housing markets,” said the Deloitte Access report.

What do you think? Is the housing market going to continue to rise? How would a housing crash affect you?

Written by Drew

Starting out as a week of work experience in 2005 while studying his Bachelor of Business at Swinburne University, Drew has never left his post and has been with the company ever since, working on the websites digital needs. Drew has a passion for all things technology which is only rivalled for his love of all things sport (watching, not playing).
Contact:
LinkedIn
Email

RELATED LINKS

Household debt at an all-time high

RBA dilemma: raising interest rates may help the economy but cripple many households.

Housing affordability not an issue

The Government's 20-month inquiry into housing affordability gave its findings on Friday.

Rent costs may bust pension system

The cost of renting and the increase in renters may blow out our pension system.



SPONSORED LINKS

LOADING MORE ARTICLE...