Australian Reserve Bank warns of dwelling risks in the market
Australian Reserve Bank has warned of cancellations in dwelling investments due to growth at an above-average rate in the market.
“Private dwelling investment had declined unexpectedly in the September quarter, largely because poor weather had disrupted construction. However, dwelling investment had grown at an above-average rate over the previous year, supported by low interest rates and further increases in housing prices. The large amount of work in the pipeline was expected to support dwelling investment at high levels over the next year or so, although there was some risk of more cancellations than usual if conditions in apartment markets deteriorated.” said in written statement.
“The combination of increased supply and lower population growth had already depressed rents and apartment prices in Perth and, increasingly, Brisbane. In contrast, conditions in the established housing markets in Sydney and Melbourne had strengthened over the second half of 2016 and investor housing loan approvals had risen over recent months. Members noted that housing market activity in Melbourne and surrounding areas had been supported by strong population growth and improvements in transportation infrastructure.”