The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Wednesday, October 26, 2011

RBA's Ric Battellino demolishes housing doomsayers

The RBA's Ric Battellino smacked-down the peddlers of doom apropos Australia's housing market yesterday...

"Also part of the problem is that people mismeasure the ratio of house prices to income. The most common measure that people do is they measure the ratio of prices in Australian cities to average income across the whole country and, of course, that ratio looks quite high because incomes in the cities - or incomes in the country are much lower than incomes in the cities. If you do the calculation properly and measure the ratio of house prices in the cities to the incomes in the cities, it's fine. House prices in the country relative to country incomes are all fine. So I don't think there's a problem there to deal with.

At the moment, the housing market is sort of drifting slightly lower. Auction clearance rates are broadly consistent with, you know, stable or slightly falling house prices. I think we've all got used to a situation where, you know, we regard house price rises as being the norm. That is not necessarily the norm and, you know, over the long run, house prices broadly have to move with income."