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Published on July 25th, 2012

Housing market still strong: RBA

Reserve Bank of Australia governor Glenn Stevens has told members of the Sydney business community at a recent luncheon that the property market is still strong.

While discussing the importance of good fiscal policy in challenging economic times, Mr Stevens refuted claims that houses in the country are overpriced.

With many experts claiming that dwelling values are artificially high, the RBA seemed keen to take the heat out of this issue.

Mr Stevens said that the chances of a so-called housing bubble bursting were less likely than in recent years, with prices now where they were in 2002.

"It has to be said that the housing market bubble, if that's what it is, seems to be taking quite a long time to pop – if that's what it is going to do,'' he said.

''The ingredients we would look for as signalling an imminent crash seem, if anything, less in evidence now than five years ago.''

According to Stevens, the national economy is a strong performer on the world stage, with many people commenting on how lucky they are to be living and working in Australia.

With a growing economy, strong employment figures and greater economic security than many first world countries, it would seem that Australia really is fortunate.

Recent data from the RBA and Australian Bureau of Statistics suggest that the housing market is a long way off reaching its former pre-GFC figures high.

However, it is thought that more competitive pricing will help to improve sales and encourage homebuyers to enter the property market.

Mr Stevens said that in the event dwelling prices did slump, it would be up to the country's industry leaders and experts to put in place measures to stimulate the sector, with the RBA suggesting increased investment in the building and construction sector.


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