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We've got record high prices in Australia, record low interest rates, some worry about
a bubble. Do you think there is a bubble that's about to burst, and cause a housing crash
like America has experienced?"
Not at all, and a lot of commentators, particularly over here [in the USA], don't understand the
Australian housing market. The fact is, we have a very generous immigration program,
and we have very slow supply coming into the market. Now rising house prices in Australia
help to make some of the more marginal new housing developments affordable and realistic
and deliverable. And in turn, that increase in supply helps to manage the market. So,
Australia is a long way from a housing bubble.
The second thing is, many Australians now are heading towards personal superannuation
that in value exceeds the equity they have in their home, and that's part of the balance
to the equation.
And the third fact is a lot of Australians put a lot of new capital into their homes,
renovate their homes, upgrade their homes, and we have the largest homes on average perhaps
in the western world, and the world more generally in size. It's a very different asset class
in Australia than in other jurisdictions.