By Shane Oliver, Head of Investment Strategy & Chief Economist from Oliver’s Insights, AMP Capital, Edition 12 2014

Key points

  • Australian housing has seen a normal response to lower interest rates. House prices are up and a building boom is on the way. This will help the economy rebalance.
  • The home buyer market is a long way from the bubble conditions of ten years ago, but the risk of a bubble is rising. Further gains in house prices are likely this year. But gains are likely to slow as the RBA steps up its warnings about excessively rising house prices.
  • The housing recovery tells us the next move in interest rates is up, probably from around September/October.

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