The new, NEW normal

Setting aside Chris Zappone’s fantastic claims of a “seismic shift” in Australia’s residential property market we can only expect that after one “once-in-a-generation” debt-fueled property binge we may see the return of more sustainable growth period in property. Let’s call it “The NEW Normal”. And what can we expect in this not so buoyant (ie:1996-2006) period? Well according to Martin North, co-author of the Fujitsu/JPMorgan Australian Mortgage Industry Report, we expect future housing credit growth to reflect fundamental factors, including normalised loan-to-value ratios, modest investor housing credit growth and tighter, more expensive funding for commercial real estate purposes, which will keep new housing starts under pressure,”

The summary then. Modest credit growth as we see the re-emergence of securitization markets loosening the big banks grip on the overall mortgage market, while new development remains restricted due to tight funding. So, if my basic Keynsian Theory serves me correctly, we can see modest growth meeting limited supply? Or am I missing something?

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