More or less mirroring developments in Auckland, Sydney property prices surged 12.4 per cent in 2014.
Howeevr HSBC Australia chief economist Paul Bloxham warns that things will cool off when the Reserve Bank hikes interest rates in 2016.
“Sydney house prices are running at an unsustainable pace,” he said. “Purchasers need to be very careful, because at some point there has to be some correction.”
HSBC is forecasting Sydney house prices to be broadly flat in 2016 rather than suffer a big fall. “The more Sydney house prices go up, the more likely it is that they will have to correct, and that’s not necessarily a bubble,” Mr Bloxham said.
One thought on “Banker warns Sydney housing market is “unsustainable””
If interest rates go up the money will flood into NZ to take advantage of the higher rates.
The exchange rate will go up.
Exporters will suffer.
Consumers will benefit from the likes of cheaper tv’s, petrol and cars etc.
If inflation takes off savers will lose purchasing power.
Borrowers like the Government will inflate away their debt.
If interest rates go up, over exposed property owners will start to fall over.Prices will fall rapidly.
In short every time you meddle with something there will be more unintended consequences.
Better to let the train wreck play out.
The Auckland housing crisis has been mainly caused by Councils mismanagement of an extended period of time.
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