Housing a key focus for RBA
House prices have increased in accordance with the rest of the economy, according to a speech made at the CITI Residential Housing Conference in Sydney by Reserve Bank of Australia (RBA) Head of Financial Stability Department Luci Ellis.
Ms Ellis' comments may interest existing homeowners, who will be pleased with consistent capital growth in their properties. This may even enable some homeowners to upgrade to new dwellings, making the most of the cheap home loans currently available from Australian lenders.
Focus on housing
Australia's housing market has been a hot topic in recent months, with Ms Ellis making note of this in her speech.
"It sometimes seems like most conversations about financial stability devolve into a discussion about housing," Ms Ellis noted.
"The Reserve Bank has for a long time put considerable energy into analysing developments in the household and housing sectors, and the risks they might pose."
Despite geographical constraints and population growth impacting the nation's housing market, particularly in areas such as Sydney and Melbourne, urban population density is far lower than many other countries.
In fact, Ms Ellis went as far to say that "Australia's cities are unusually low density", pointing out that its urban population density was behind the likes of New Zealand, Canada, the United States, Japan, Spain, France and South Korea.
However, there are still risks for future financial stability as cities continue to develop, noted Ms Ellis.
Thinking about the options
Ms Ellis' comments may encourage those with a home mortgage to consider their future dwelling and financial arrangements.
For instance, some individuals may want to consider whether to shift from an apartment to a roomier house, and whether to reside in inner-city suburbs, city fringes or more regional areas.
According to a report earlier this year from Bankwest, 87.1 per cent of medium density dwelling approvals in the 12 months to February originated from capital cities, showing that these areas may be feeling the squeeze.
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