Australia could experience “the mother of all dwelling booms”, according to the veteran columnist Robert Gottliebsen.
“Australians are going to rush for bricks and mortar,” he forecast pinpointing a three-pronged expected boost to prices.
“First is a dramatic push to lift the demand for dwellings by banks offering cut mortgage rates thanks to Reserve Bank Governor Glenn Stevens.
“But second, and just as importantly, there is reluctance by banks to fund new supply.
“In any commodity if you inflate demand and squeeze supply, prices go through the roof.
“Thirdly taxpayers will subsidise the boom via a massive increase in the use of negative gearing via both personal and superannuation tax breaks.
“Longer term, that will damage the economy and the Reserve Bank will have to take responsibility for pulling the price boom trigger,” he wrote on Business Spectator.
He says most of the demand will be from investors, including…
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