- Reserve Bank expected to keep cash rate on hold tomorrow
- Says its 'misleading' to suggest low interest rates are main driver of house price growth
- Calls again for an exclusive regulatory body for the industry
In his weekly snapshot of key topics surrounding the real estate market of New South Wales, Real Estate Institute of New South Wales (REINSW) CEO, Tim McKibbin, has once again raised housing affordability concerns.
Mr McKibbin started his remarks by referring to the Reserve Bank meeting tomorrow. While virtually nobody expects the official cash rate to rise, ongoing concerns about the rise in house prices are expected to be brought up during the broader interest rate discussion, although he reiterates that low rates are not the main driver.
“It’s true that low rates supported the housing market turnaround last year but it’s misleading to suggest cheap finance is the main factor,”
“Like any market, when the intensity of demand cannot be satisfied by low availability of supply, prices will continue to rise.”
Tim McKibbin, REINSW CEO
His remarks come as CoreLogic figures show that nationally there was a 1.8% increase in home values over April, which he says shows that housing market entrants or upgraders are “justified in being concerned about affordability.”
“The answer lies on the supply side of the equation as the continuation of the low rate environment is an important platform for the broader economic recovery we’re in the early stages of.”
The RENSW Roadshow continues this week, with events occurring in Batemans Bay and Wollongong. Along with events being valuable for attendees, Mr McKibbin said the events are valuable to himself and the rest of the Institute as it gives them a greater understanding of the impact broader trends are having on specific localities.
Additionally, he reiterates calls for an exclusive regulatory body for the industry.
“The stories we are hearing underline the need for reform, including the need for a regulatory authority which better understands the complexities of the industry that’s the state’s biggest economic contributor.”