In a press release issued by the Real Estate Institute of Australia (REIA), REIA president, Mr David Airey said he was stunned to hear RBA Governor Glenn Stevens tell Channel 7 Sunrise viewers that “property was no longer the easy path to prosperity”.
In substantiating his claims that property can indefinitely increase faster than wages without any economic consequences, he claimed there was “pent up” demand in the market and this bubble is fueled by “short supply” and not speculation.
He even indicated over leveraging and piling up on debt should have no bearing on interest rates, claiming “Mr Stevens has in the past said that property prices were a ‘social issue’ and have no bearing on monetary policy or interest rates.” This may have been the case prior to a bubble of this size, but the level of debt Australian’s are now carrying along with external shocks such as China’s property market correcting, has the potential to plunge Australia into a long depression.
“When we look back on this period it will be seen as a normal upturn followed by a stabilisation period,” Mr Airey concluded.
» REIA stunned by RBA chief’s remarks about property – Real Estate Institute of Australia, 29th March 2010.