Dramatic house price growth a thing of the past: Westpac
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|Friday, 15 June 2012|
Compound growth in house prices is over for good, according to Westpac CEO Gail Kelly.
Speaking to an economic forum in Brisbane this week, Ms Kelly said the nation would never see another housing boom similar to the one experienced over the past decade.
Senior economist for the Housing Institute of Australia (HIA) Dr Harley Dale agreed with Ms Kelly, and said the population would have to significantly increase if another boom were to ever happen.
“If you’re expecting the price of your home to rip along at a breakneck pace, you’re not going to get it,” he told The Adviser.
“We need to be careful how we define never, but it certainly is not going to happen in the foreseeable future.”
“It’s because we had lots of factors that came together at the one time, we had structural lowering of interest rates from the mid to late 1990s, we had tax reform in the early 2000s, the lagged effect of financial and banking section liberalisation leading to a far more competitive lending market.
“And all that happened at the time when we had the baby boomer population bubble coming through the system. We are unlikely to see another boom in population, as such, we are unlikely to see a jump in house prices any time soon.”