Australian Investment Blog

The housing price “pack of cards” - a concern for our “big 4” banks?

After a weekend lacking any major economic news, one headline that is in most of the financial press this morning is “6.7% of first homes purchased now have the official backing of a family member”. The number of first home buyers actually helped by their family is significantly higher, estimated by John Symonds (Aussie Home Loans) to be around 30%. First impressions are that a “pack of cards” is being created, this may be true but short term the numbers are very supportive of Australian Banks being able to absorb the big concern = higher interest rates.

• Since the RBA started cutting interest rates in November 2011 Sydney housing prices have risen by well over 30%.