INTHEBLACK September 2021 - Flipbook - Page 48
F E AT U R E
// P R O P E R T Y M A R K E T
Dr Cameron Murray,
University of Sydney
Right: The median
price of properties in
Melbourne has risen
to a record high of
the past year.
DOWNSIDE TO GOVERNMENT INTERVENTION
Pete Wargent, international property buyer,
finance and real estate expert and co-founder of
property buying company AllenWargent, does
not endorse government intervention as a tool
for taking the heat out of the market and making
housing more affordable.
In particular, he is opposed to the Reserve
Bank of Australia using policy levers, such as
instituting limits on the percentage of high loanto-value loans and enacting greater scrutiny over
borrowers’ income and expenditure.
“Overzealous macroprudential measures choke
off the credit supply to the economy, as small
business owners also use equity from housing,”
Instead, more affordable housing should be
built to address the issue of younger people
being priced out of the market.
“Realistically, sizeable blocks of vacant land
will be hard to come by in the capital cities in
established suburbs, so planning should allow for
unit developments on brownfield sites and above
train stations,” he says.
48 ITB September 2021
Social housing is important, too, Wargent
argues, but notes there doesn’t seem to be much
political will in this direction, “even at a time when
we’re running a massive budget deficit”.
“I wouldn’t hold out much hope when the talk
returns to balancing the books,” he says.
As far as the next two decades are concerned,
Wargent does not foresee a property crash on the
horizon. In fact, he intuits the opposite.
“Real estate tends to be cyclical, so the cycles
will likely continue,” he says. “A lot can change in
20 years, but Australia is a clean, safe and desirable
country, with an open economy, a free-floating
currency and control of its own monetary policy,
so I expect population growth to return and the
sector to thrive, if not boom.”
Are we in a property bubble? “Not at the
moment,” he says.
“There may be some nascent risks just beginning
to emerge in some regional markets, if there is a
population shift back towards the capital cities
in the coming years, but it’s hard to say we’re in a
bubble with [mortgage] serviceability at the easiest
levels in decades.”
“A LOT CAN
TO THRIVE, IF