Australia’s Treasury secretary has calmed fears of a bursting property bubble in Sydney in Melbourne, saying there has been a healthy increase of housing supply.
In an address to senators in Canberra, Treasury secretary John Fraser said he is not worried house prices dropping significant, despite warning of an “unequivocal” housing bubble in Sydney and Melbourne in June, Fairfax
“We'll see what happens with housing,” Fraser said, according to Fairfax
“There's been a supply response, which is good. So there's more houses, you know, the pipeline of housing construction [has increased].”
Whilst he said prices are unlikely to keep rising at the pace we are currently witnessing, there should be no fear of plummeting prices and financial instability.
“I'm not particularly worried. I think the measures that have been taken by the Australian Prudential Regulation Authority
, and the banks' own measures, have been sensible,” Fraser said, according to Fairfax
“It's for everybody to make up their own mind.
“Eight point nine per cent [in a quarter], let's say ... that's a big annual rate of increase. It means Sydney house prices are going to double within three years if that were sustained, [but] I don't think it's being sustained.”