Treasurer forced to defend Aussie housing market in US interview

by Mackenzie McCarty15 Oct 2013

Treasurer Joe Hockey was forced to defend the Australian housing market during a visit to the US this week in an attempt to rectify foreign investor perceptions that a property bubble looms.

In a televised interview with US-based reporter Amanda Drury, Hockey told CNBC listeners that overseas commentators don’t understand the Australian housing market, which has recorded strong price growth this year as a result of low interest rates.

Hockey was asked in the interview if he was worried about a bubble bursting and causing a housing crash like the one the US experienced during the GFC.

“Not at all. A lot of commentators, particularly over here, don’t understand the Australian housing market,” he replied.

“Australia is a long way from a housing bubble.”

Hockey’s comments come just weeks after ANZ CEO, Philip Chronican, dismissed concerns over a housing bubble, saying other factors will take the heat off the property market.

 Chronican predicted that weak jobs growth and dampened consumer sentiment will put the brakes on rising home prices.

Nationwide house prices rose 5.8% over the year to mid-September, with Sydney prices up 8.2%.

However, Hockey attributed the recent surge to high immigration and a lack of new homes being built. He also suggested there was a benefit to rising prices.

“Rising house prices in Australia help to make some of the more marginal new housing developments affordable, realistic and deliverable,” he said .

“In turn that increase in supply helps to manage the market.”


  • by ?? 15/10/2013 9:29:15 AM

    No mention to the Americans that in Australia you cant just leave your keys in the mailbox and walk away from your commitments???
    The home lending laws of the 2 countries are poles apart. We would have crashed the same time they did, if we had the same rules in place. And bubble? Seems to only be affecting a few cities. Not seeing any/much improvement in mine.

  • by cynical 15/10/2013 11:40:34 AM

    Perhaps there also needed to be the relationship to domestic wages mentioned. Seems like Joe just wants to fuel the bubble with more overseas buyers driving up prices. Lets make housing even more unattainable for the local population.

  • by Jon 15/10/2013 12:31:57 PM

    Comparing the Australian Property Market to the US is absurd. Where is the oversupply of property issues in Australia? Not seeing a great deal of vacant homes here, because we generally only build properties that there is a demand for (especially post GFC), and prices generally increase due to an increase in demand and supply not keeping up.