Aus­tralian home prices slow­down ‘no cause for con­cern’

The Sun (Malaysia) - - SUNBIZ -

MEL­BOURNE/SYD­NEY: Aus­tralia’s cen­tral bank gover­nor said yes­ter­day the cur­rent slow­down in the hous­ing mar­ket isn’t a cause for con­cern but flagged the need for pol­icy to re­main at record lows for the fore­see­able fu­ture with wage growth and in­fla­tion still weak.

Home prices across Aus­tralia’s ma­jor cities have fallen for suc­ces­sive months since late last year as tighter lend­ing stan­dards at banks cooled de­mand in Syd­ney and Mel­bourne – the two big­gest mar­kets.

Hous­ing credit growth has hit its slow­est pace in six years, build­ing ap­provals have come off a peak and home prices posted their first an­nual drop since 2013 last month.

How­ever, Re­serve Bank of Aus­tralia (RBA) gover­nor Philip Lowe said these is­sues are not a cause for con­cern.

“We shouldn’t fret just be­cause hous­ing prices are not rising at the rate they used to. And if they come down that’s okay,” Lowe said in Mel­bourne, re­spond­ing to a ques­tion af­ter a speech ti­tled “Pro­duc­tiv­ity, Wages and Pros­per­ity”.

“House prices in Syd­ney and Mel­bourne are still 40% up from where they were in 2014. You’ve got to have a longer-term per­spec­tive here.”

The two cities com­prise about 60% of Aus­tralia’s hous­ing mar­ket by value and 40% by num­ber of homes. – Reuters

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.