Housing bubble debate boils over
Sep 24th 2010, 8:38 pm
#1
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Location: Adelaide, South Australia
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Housing bubble debate boils over
The simmering debate about whether Australia has a housing bubble erupted again this week over a Commonwealth Bank presentation that seeks to assure global investors Australian real estate is a safe bet.
Senior Commonwealth Bank executives have travelled the world in the past couple of weeks with a presentation showing how Australian house prices, and the key price to income ratios, compare favourably with similar countries.
"Housing affordability has actually been going sideways for the last five to six years," said Craig James, the chief economist of the bank's trading arm, CommSec.
"This is something which has now been acknowledged by the Reserve Bank, so one of the great myths has now been debunked - housing is not unaffordable here in Australia."
CBA has waged its war against what it believes are housing doomsayers with graphs, numbers and international comparisons.
In its presentation, the bank rejects arguments that Australia's housing is relatively expensive compared to incomes.
(Source).Senior Commonwealth Bank executives have travelled the world in the past couple of weeks with a presentation showing how Australian house prices, and the key price to income ratios, compare favourably with similar countries.
"Housing affordability has actually been going sideways for the last five to six years," said Craig James, the chief economist of the bank's trading arm, CommSec.
"This is something which has now been acknowledged by the Reserve Bank, so one of the great myths has now been debunked - housing is not unaffordable here in Australia."
CBA has waged its war against what it believes are housing doomsayers with graphs, numbers and international comparisons.
In its presentation, the bank rejects arguments that Australia's housing is relatively expensive compared to incomes.
This is madness. I know CBA is the biggest mortgage lender in Australia and therefore has a vested interest in talking up the real estate market, but to claim there is no housing bubble...?
A picture tells a thousand words:
Sep 24th 2010, 8:46 pm
#2
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Posts: 14,188
Re: Housing bubble debate boils over
[indent]A picture tells a thousand words:
http://i53.tinypic.com/mw5cup.jpg
http://i51.tinypic.com/16gd8w0.jpg
http://i56.tinypic.com/2gumveo.jpg
http://i53.tinypic.com/mw5cup.jpg
http://i51.tinypic.com/16gd8w0.jpg
http://i56.tinypic.com/2gumveo.jpg
It could of course just be my VPN getting the way.
Sep 24th 2010, 8:59 pm
#3
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Location: Brisbane
Posts: 70
Re: Housing bubble debate boils over
The CBA are also talking up the Aussie dollar being talked about on the $1.93 thread. Just a day after Bloomberg predicted it was over valued.
Sep 24th 2010, 9:16 pm
#4
no stressin no fussin....
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Location: Fantasy Island....
Posts: 12,616
Re: Housing bubble debate boils over
Nothing wrong with bigging up money lending, especially when you work in a bank
and when few in your country can afford to borrow, why not spruik abroad
wise fella that craig james...
and when few in your country can afford to borrow, why not spruik abroad
wise fella that craig james...
Sep 24th 2010, 10:01 pm
#5
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Re: Housing bubble debate boils over
Sep 24th 2010, 10:04 pm
#6
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Re: Housing bubble debate boils over
Obviously the CBA need cheap (or rather cheaper) foreign funds to support the lending over here.
I suspect the CBA are now the biggest mortgage lender in Aus. (Can't be bothered to check so
if that's not right)
I suspect the CBA are now the biggest mortgage lender in Aus. (Can't be bothered to check so
if that's not right)
Sep 25th 2010, 5:47 am
#8
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Re: Housing bubble debate boils over
There is a concerted effort going on to talk up the strength of Australian Real Estate values because - as the 4th largest offshore issuer of Residential-Mortgage Backed Securities (RMBS) aussie banks and the RBA (currently number one investor currently in these bonds as no-one else wants to buy them) would stand to lose billions if house values slipped
Sep 25th 2010, 6:20 am
#9
no stressin no fussin....
Joined: Aug 2007
Location: Fantasy Island....
Posts: 12,616
Re: Housing bubble debate boils over
There is a concerted effort going on to talk up the strength of Australian Real Estate values because - as the 4th largest offshore issuer of Residential-Mortgage Backed Securities (RMBS) aussie banks and the RBA (currently number one investor currently in these bonds as no-one else wants to buy them) would stand to lose billions if house values slipped
