Aussie property prices frightening, says real estate commentator
A real estate expert has labelled Australian property prices “frightening”.
KordaMentha real estate partner Paul Mirams told S&P Global’s property outlook the Australian property market is nearing the top of its cycle, with price rises becoming concerning, the Australian Financial Review has reported.
Mirams made the statements during a panel discussion with S&P analysts, Stockland’s general manager for Treasury John Arentz and AMP Capital Investors senior credit analyst Tim Jarvis, the AFR said. Mirams also referred to recent speculation that apartment oversupply could see prices fall, with recent figures from the Australian Bureau of Statistics showing multi-unit dwelling approvals rose 8.1% in April.
"When you start to see supply three times the norm you have to ask the questions. Statistically it looks horrifying but I think part of it is playing catch-up,” Mirams said.
S&P senior director for corporate ratings Craig Parker also raised concerns about the commercial property market, the AFR said, echoing statements from the RBA that compressed rental yields could put the commercial market at risk.
"There has been a disconnect between asset values and rental returns. The office market costs an enormous amount of money to retain tenants," Parker said.
But S&P directors Alisha Treacy and Shared Jain argued for the underlying strength of the property market, saying arrears remained well below the long-term average.