Australian housing not perceived as being in a bubble: US real estate industry boss
Australian house prices are high but they reflect the high cost of living, says Gary Thomas, president of the US National Realtors Association, who is currently visiting Australia.Thomas says there is no perception among his constituency that Australian housing is in a bubble that may burst – a claim made by the likes of US economist Harry Dent and others.
The National Realtors Association is the largest trade association in the US, representing around one million US real estate agents.“Australian property prices certainly are high relative to what we pay in the US, but it all depends on your average income,” Thomas tells Property Observer.
Thomas has more than 35 years’ experience in American real estate and has occupied numerous industry roles.
He operates real estate business Evergreen Realty, which has seven offices throughout Orange County, Southern California with a head office in Irvine and more than 7,000 estate agents on its books.
The most recent figures from US data provider CoreLogic showed that US home prices, including distressed sales, increased on a year-over-year basis by 9.7% in January 2013 compared to January 2012
Morgan says the US market is definitely improving with prices starting to inch up including in his home state of California and in Florida and Arizona, to name just a few.“It’s kind of ironic that the recovery is occurring in the states the hardest hit,” he says.
In Southern California he says there is only 30 days’ worth of real estate inventory available to purchase at current sales rates – very low by historical standards.
Despite the lack of stock, house prices are not accelerating as they did in the boom years prior to the GFC, though they are rising at a more sustainable pace.
Among the reasons for this is that obtaining financing is still very hard with much stricter lending practices now in place.“It’s like an inquisition” is how he describes lender inquiries into whether a borrower should receive mortgage approval.
By Larry SchlesingerThursday, 14 March 2013