Australian housing demand to shrink: economist

A leading Australian economist said on Tuesday that there are already signs that demand for residential property is starting to wane.

UBS Australia chief economist Scott Haslem said Sydney's record high auction clearing rates and the rapid price growth in the past three years meant the market could be considered to be in a bubble, local media reported.

"The Sydney housing market does have some aspects that are bubble-like," he said.

"The price growth and the level of auction clearing rates are consistent with periods like that."

But he expects the market to cool down in the near future, noting that property vacancy rates were moving higher, and national housing turnover had dropped in the past month in spite of historically low interest rates.

And he said property prices had risen much faster than rents, making the market less attractive to new investors. Endi