The banker responsible for setting interest rates has admitted that high immigration is an important factor in driving up house prices in Australia.
Homes in Sydney and Melbourne remain particularly priceless, despite two years of falling prices.
Reserve Bank of Australia Governor Philip Lowe said there was a link between expensive property prices and high immigration levels.
The banker responsible for setting interest rates has admitted that high immigration is driving up house prices in Australia (pictured is a house in Bondi in the eastern suburbs of Sydney). Homes in Sydney and Melbourne remain extremely priceless, despite two years of price drops
& # 39; If you ask a freshman economics student what will happen to house prices – we all want to live in fantastic locations on the coast, each person has a large piece of land and does not invest enough in transportation and allows population growth quickly , explain it? I think you're going to get high house prices, & he told the Good Weekend magazine.
A record number of 848,570 people moved in the year until May, which means an annual increase of 5.7 percent.
After the departure was taken into account, Australia's net immigration rate was 294,430 – or a level that was more than four times the 20th century average of 70,000.
This number included permanent arrivals, skilled migrants and international students who have been studying in Australia for several years.
Reserve Bank of Australia Governor Philip Lowe said there was a link between expensive property prices and high immigration levels (depicted are young women on Bondi Beach)
The average house price of Sydney of $ 877,220 is more than 10 times an average full-time salary of $ 85,000.
Reserve Bank of Australia Governor established a link between population growth and house prices
To afford a typical suburban home in the west of the city, a borrower must earn $ 156,000 a year to prevent mortgage stress or pay more than 27 percent of his repayment money.
In Melbourne, the median house price is $ 716,542, which means that a borrower earns $ 127,385 to repay a loan.
Dr. Lowe also made the connection between high house prices and a lack of investment in large transport infrastructure projects.
& # 39; Infrastructure investments are actually the best housing policy & # 39 ;, he said.
Dr. Lowe, who lives in Randwick in southeast Sydney, argued that building more large-scale transportation projects would result in home prices & # 39; lower relative to income & # 39; would be
A story about two major cities leading the recovery
SYDNEY: accommodates 1.5 percent to $ 877,220; apartments rise 1.8 percent to $ 699,126
MELBOURNE: accommodates 1.3 percent to $ 716,542; apartments with 1.5 percent to $ 540,056
CANBERRA: accommodates 1.1 percent to $ 665,887; apartments down 0.3 percent to $ 426,088
HOBART: accommodates 0.8 percent to $ 498,734; apartments fell 0.9 percent to $ 375,831
BRISBANE: houses flat at $ 533,101; apartments increase by 1.1% to $ 375,423
ADELAIDE: accommodates 0.3 percent to $ 462,945; units increased by 0.4 percent to $ 322,142
PERTH: homes falling 0.6 percent to $ 454,774; units a decrease of 0.1 percent to $ 345,311
DARWIN: accommodates 1.6 percent to $ 470,099; apartments fell 0.5 percent to $ 289,687
Source: CoreLogic Home Value Index for August 2019
& # 39; We can do very little to increase the supply of well-located land, but there is one thing you can do – build great public transportation. & # 39;
Dr. Lowe, who lives in Randwick in southeastern Sydney, argued that building better transport links would make suburban and regional areas attractive to buyers, which would distribute demand more evenly between cities and the country, thereby moderating prices.
The Reserve Bank chief argued that record low interest rates were not enough to stimulate the economy after the cash rate was lowered to a record low of one percent in June and July.
Dr. Lowe and several economists have called on the federal government to increase spending on transport infrastructure in an attempt to turbulence economic activity.
Australia's gross domestic product grew 1.4 percent in the year to June, which was the weakest pace in ten years, and continued to decline per capita.
After the global financial crisis of 2009, this was the weakest economic growth since 2000.
State governments are doing their bit, with New South Wales spending more than $ 12 billion on the second phase of the Sydney Metro, which from 2024 connects Chatswood on the lower north coast of the city with Bankstown in the southwest.
It will also include a second tunnel under Sydney Harbor.
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