Lots of noise, but no housing bubble

Co-founder of the Switzer Report
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There is no housing bubble in Australia.

Maybe in a couple of years’ time when price growth is rampant and there is something to “prick” the bubble – like new supply of housing stock – but not yet. There is lots of noise, and many alarmist headlines.

The latest instalment came last Thursday, after the RBA published its semi-annual ‘Financial Stability Review’. “DIY super funds take $80bn property bite”, The Australian screamed. The Australian Financial Review wasn’t much better. Only in the accompanying table did The Australian show that commercial property accounted for 77% of this exposure, and neither saw fit to mention that as a proportion of all assets, the total exposure by SMSFs to residential property is a tiny 3.5%. Yes – you read it correctly – 3.5%.

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