Property Bubble may not burst, just deflate a little
Nobel Prize-winning economist Professor Vernon Smith has warned Sydney and Melbourne’s housing market looks like a housing bubble. Reserve Bank Governor Glenn Stevens now also concurs.
The leading economist has also warned Australia must heed lessons from America’s subprime mortgage crisis and housing crash. MGSM Dean Alex Frino was hosting Professor Vernon Smith’s visit in Sydney and speaks about his work on bubbles.
But there are significant differences to the US situation, says Real Estate Institute of NSW President Malcolm Gunning. He sees major increases in the outer ring of suburbs in the Hills, the Shire, Upper north shore which is driving the market currently. He predicts a flattening out of the bubble with inner areas auction rates coming down to a more usual percentage.