JP Morgan plays down property bubble talk

JP Morgan plays down property bubble talk

As the price of property increases, the rising cost of the asset class should not be looked at as a “bubble” but a long-term structural problem, says JP Morgan.


Speaking in Sydney yesterday, JP Morgan principal of Digital Finance Analytics, Martin North, said the situation is driven by a “fundamental economic equilibrium”.

“I don’t think it’s a bubble because it is fundamentally driven by a set of economic variables which are complex, but can be tackled if we look at it holistically,” he said.

Mr North indicated that a bubble is a short-term spike that cannot be explained by an economic situation.

Regarding the substantial increase in the cost of property, it can be explained by the imbalance in terms of supply and demand that has been evident for the last 15–20 years.

“State, federal, tax, supply, demand – it’s that complex metric that needs to be addressed.

“The problem is that we don’t have the people are prepared to look at it holistically,” Mr North said.

Mr North said both state and federal governments need to look at the structural issues within the property sector if long-term problems are to be addressed.

 

JP Morgan plays down property bubble talk
investordaily image
ID logo
promoted stories

Appointments

Blake Briggs

FSC loses two senior policy managers

Tim Stewart

John Patrick Moorhead

AMP Capital appoints new CFO

Staff Reporter

Phoebe Ieong

BNY Mellon appoints head of distribution, APAC

Staff Reporter

Analysis

Doug Morris

What a blockchain-powered ASX should mean

Doug Morris

Lucy O’Carroll

Separating the signals from the noise

Lucy O’Carroll

Dan Bosscher

Could passive investing have structural issues?

Dan Bosscher