Morning Report Tuesday 19 May 2015
Should we be scarred of Property in Sydney and Melbourne?
The Chairman of the Australian Securities and Investments Commission (ASIC), Greg Medcraft has voiced his concerns over a potential property bubble which would damage our $550bn self-managed super sector. It appears very likely that the Federal Government will limit borrowing by self-managed superannuation funds to purchase investment properties.
• The long term average disposable income to average price ratio is 4-5 times but currently its at historic highs heading towards 6 times.
We all know Australia is property obsessed, but the concerns are growing in Canberra that investors are putting all their eggs in one basket, property. The supply of new properties is especially surging in Melbourne and Brisbane. With rental yields at their lowest level since 2010, the picture is likely to get worse short term.
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