Australia’s premium housing markets have had a wild ride over the past three years, Lawless says.

While values in the million-dollar-plus sector of the residential market are up, sales volumes remain low, he notes.

His analysis of recent movements in the top end of the property market reveals that the most expensive 20 per cent of Australia’s suburbs climbed 19.8 per cent in value in 2007, compared to 13.7 per cent across the broader market.

“As the global financial crisis kicked in and started to bite, with shares and property being sold off to recoup further portfolio losses, values across this same set of premium suburbs fell by 7.4 per cent compared with a 2.5 per cent fall in all home values,” Lawless says.

The premium market turned again in 2009, recording growth of 12.1 per cent over the calendar year, compared to 11.3 per cent across the board.

“For those that can afford the premium price tag premium property markets have generally provided stronger capital gains than the broader marketplace thanks to the inherently tight supply of inner-city, coastal and character properties,” Lawless says.

According to Mr Lawless, a housing ‘bubble’ suggests housing values increased too rapidly and are set to experience a rapid decline, a fate not likely to come to fruition in Australia.

“Bubble is a word that has been used pretty loosely in relation to Australia’s real estate market since about 2003. Generally I would disagree with using this term,” he told Real Estate Business.

“Across Australia’s capital cities, home values have increased by just 6.2 percent per annum over the last five years – a rate of growth that is in line with wages growth which has been 6.0 per cent per annum over the same time frame.

“Rather than experience a rapid decline, my view is that home values will continue to show modest growth due to the ongoing under supply of dwellings and rapid population growth that creates demand for housing.”

Mr Lawless said despite the fact that 14,000 new homes are approved for construction each month, the rate of new dwelling approvals is much lower than what is required – approximately 17,400 new homes need to be approved each month.

“With such strong demand for new housing and an ongoing undersupply together with improving consumer and business confidence, it is reasonable to expect that the building industry will lift their game and start producing more housing stock.  The strategic imperative is to deliver stock to the market that is aligned with consumer demand.   That means a focus on developing affordable and well located housing stock,” Mr Lawless said. ]]> http://www.offtheplangoldcoast.com.au/2010/04/we-are-not-in-a-housing-bubble-rp-data-150410/feed/ 0