Lending curbs will have ‘grinding down effect’: Tarbey

After the Reserve Bank made clear its concern over investor activity, Mr Tarbey said a smarter way to cool the market is by increasing supply at a local government level.

“Those tools that they introduce will have a grinding down effect on any free enterprise in that area and it will come back to a government instrument,” Mr Tarbey said.

“The problems we have had relate back to supply,” he said.

“If the supply issue is fixed and the counsels and the green and red tape issues were resolved and we had a smoother flow of developments through that didn’t take so long to get out of the ground, we wouldn’t have this high investor activity like we have.”

Mr Tarbey said that investors in Sydney are like “ants around a spot of honey” because of a lack of supply, while in regional areas it is a different story.

“If you go out to country towns or further out to regional areas, you don’t see a rush for property there,” he said.

“You don’t see properties going up for auction and people clambering around the place.

“It’s because there is a supply issue in Sydney.”

However, Mr Tarbey said that the market has changed over the past few weeks with more housing stock coming onto the market.

“I think we are starting to see a flattening out of the market across the country,” he said.

“We’ve had four weeks in a row of stock increase.”