Mixed Feelings About Australia’s Property

Australian policy makers have two housing markets to worry about, and it’s a toss up which carries the most risk.  One is too cold, the other too hot. One they can’t do anything about as it is in China, the other is a home grown headache the authorities are just starting to wrestle with.

How they unfold will have lasting ramifications for Australia’s economy and interest rates.  “There are two prices that matter for Australia right now, those for homes and those for commodities, said Paul Bloxham, chief economist for Australia at HSBC.

“Since the Chinese housing market is such a driver of demand for commodities, it matters just as much in the big picture as the domestic market,” he added.  The property sector accounts for about 15 percent of China’s economy and impact some 40 industries from furniture to steel, is of increasing concern to Beijing as it drags on growth.


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