2010 property growth

Tony Richards, the reserve banks head economic analyst warns that 2010 may be the setting for a housing bubble if supply does not keep up with the growing population. Housing prices may move towards “undesirably” strong growth. He also warned rising housing prices may not accurately reflect the wealth of the nation, as continued growth would put housing affordability out of reach for many people. "When the price of housing rises, higher-income houses tend to benefit at the expense of lower-income households," he said. In this situation very strong growth in housing prices become unhelpful from a social perspective. He made the bold statement ''Nevertheless, if housing affordability is a concern, it will be necessary to keep working to reduce impediments to the construction of new housing, both inside our cities and at the fringes.'' What we are seeing is a lack of supply. Prices have been resilient, but the supply is not keeping up with growing demand which is causing the problem, and we will see inflationary pressure arising. And from personal experience the greatest impediments to the construction of new housing are the local councils who want to wield their powerstick at times in non rational ways.
A cautionary note: If we get this wrong there is a big economic risk