The Australian government have one eye firmly open to the possibility of a “Housing market bubble” which resulted in the recent hike in interest rate. A report by QBE Lenders’ Mortgage Insurance (QBE LMI) points towards double digit growth between June 2009 and June 2012, QBE LMI chief executive Ian Graham told researchers that “low interest rates, solid growth in rents and housing shortages would create favourable conditions for a strong recovery in residential property prices through to 2012”.
David W Redfern of DSR Asset Management looked upon the interest rate hike as “a positive move by the Australian Authorities” He commented that “whilst double digit growth in real estate prices is great news for investors , long term economic sustainability is key to real estate investment success. Investors looking at Australia are confident that the economy is being managed well and that the “green shoots” of growth is sustainable. Add to this the good regulatory framework in Australia and you have a set of factors that can only succeed”
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