Don’t crack open the bubbly yet on housing market recovery: John Symond

Aussie Home Loans founder John Symond has taken a circumspect view on the 1% rise in dwelling prices recorded by RP Data-Rismark over the month of June.

“It’s a bit early to be cracking open the bubbly,” Symond says.

“You have double the number of homes on the market and double and treble the length of time for them to sell – that creates a lag.”

Symond says what may have helped the RP Data numbers were state governments bringing forward incentives for first-home buyers.

“There’s a whole lot of reasons.”

“It’s just too early… It’s still all negative news,” Symond said on Channel 7’s Sunrise program today.

He says normally a 1% to 1.25% drop in interest rates (the cumulative size of RBA rate cuts since November is 125 basis points) would result in a surge in home-buyers, but consumers remain cautious and are not diving into the market.

Symond says the RBA may cut rates again in the next few months but this will depend on what happens in Europe and if local data continues to be soft.