Property pundits have dismissed talk of a housing bubble, labelling it “misleading”.
Speaking at the Melbourne Property Outlook 2011 conference yesterday, Westpac senior economist Justin Smirk said the real measure of a property market’s viability is the amount of income coming into it.
“While it may have become harder for single households, dual income households are helping to support the market,” he said, dismissing suggestions that the property market is too inflated and will pop soon.
WBP Residential Advice chief executive officer Greville Pabst echoed Mr Smirk’s comments, stating that property prices were not over inflated in Melbourne.
“There’s no question that the Melbourne market and those in other major cities are less affordable than they were 10 years ago. But that trend is shaping demand, not breaking the market.
“While I expect the market to be cooler for the next six months, I don’t see any danger of a housing bubble in Australia.”