Australia added nearly 452,000 to its population between September 2008 and September 2009 according to Bureau of Statistics.
The growth rate in population has gone from around 200,00 a year in 2004 to over 400,000 for the past couple of years.
At least it seems not to be accelerating, but now that the worst of the “crisis” is behind us and Australia shines as a beacon of developed country growth, who knows…
By sheer coincidence RBA Assistant Governor, Philip Lowe was speaking to the Australian Industry Group 10th Annual Economic Forum today and one of his themes was the pressure on the housing stock.
As he put it,
It is, however, clearly desirable to avoid significant imbalances developing in the housing market, both in terms of the supply-demand situation and the price and financing dynamics.
and
On the financing side, we are currently not seeing the type of financial developments that caused concern in 2002 and 2003……This is good news, as it would obviously be unhelpful if a speculative cycle were to emerge on the back of the recent strength in housing prices. This is an area that lenders and current and prospective home owners will need to watch carefully over the months ahead.
For “financing dynamics” read 100% mortgages and don’t worry about that income documentation.
If that last bit is not a shot across the lenders’ bows from Stevens of the RBA, then Tiger Woods is a virgin.
The imbalance Mr Lowe is referring to is the pent up demand generated by high levels of population growth, driven by “new” Australians, set against a lack of new houses being built (as opposed to the heaps spent on upgrading, like that new Packer pool).
Governor Glenn and his band of merry men do not want to be caught between the Scylla of a housing “bubble” or the Charybdis of having to slow the economy with higher interest rates.
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