The Deputy Governor Of The RBA Says You're Overreacting If You Think There's A Housing Bubble

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There’s been a lot of talk about housing bubbles lately.

Rates are at a record lows. But Reserve Bank of Australia assistant governor Malcolm Edey does not think it is time to worry.

From The Fin, here’s what he told a conference today:

“There are periods when the rate of increase in house prices has been higher than average and periods when it has been lower than average.

“We are in a one of the higher than average periods at the moment, but the continued rushing to reach for the bubble terminology … every time the rate of increase in house prices is higher than average, which by definition is 50 per cent of the time, you just have to be unrealistically alarmist on making that call every time it happens.”

This week the IMF released a report warning of the dangers of low interest rates. And the RBA, in its minutes yesterday, reminded banks they need to be prudent in their lending.

Adding to this, a report by property researcher SQM recently predicted average house prices in Sydney could rise by 20% in 2014.

Now read: ‘A Beast Unto Itself’: A New Report Says Sydney House Prices Could Soar By 20 Per Cent

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