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Tight Supply Key
Tight supply key
Lisa Carapiet
Australian housing may be expensive, but it is supported by a severe lack of supply, AMP Capital Investors's Shane Oliver says. In his latest market update, Dr Oliver flags that housing affordability is certainly worsening, constraining average house price growth to around 5 per cent over the year ahead. He predicts middle to upper-end housing could be mildly stronger, being less sensitive to mortgage rates. "High house prices and high household debt levels remain Australia's Achilles heel. A renewed deterioration in affordability is also a big negative," Dr Oliver says. "However, given constrained supply, low levels
of mortgage stress and the improving economy the most likely outcome is for constrained gains over the year ahead." Dr Oliver says that while the underlying housing demand will be around 200,000 this
year, there will be only about 165,000 houses started in Australia.
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