Reserve Bank of Australia (RBA) Governor Glenn Stevens said property prices in Australia were unlikely to collapse as they had in the United States and the United Kingdom.
Australian house prices dropping 30 per cent to 40 per cent in value probably won’t happen, Stevens said in Sydney this week.
“House prices have declined a bit – just a little bit, though. Some of the very preliminary monthly data suggests stabilisation.”
Australian real estate does not have the same dynamics as other countries, he said.
Australian demand for homes is said to exceed supply, with ANZ Banking Group forecasting the housing supply deficit will climb to 200,000 by 2010.
US house prices tumbled 17.4 per cent for the year to September, S&P/Case-Shiller data showed. There were also 3.9 million unsold American homes as of August, according to the National Association of Realtors.
There were serious questions over why Australian homes were so costly given the huge amount of land and fewer people, but Stevens said those were probably structural issues.
Separately, Stevens said China was now quickly moving policies in an expansionary direction, having once sought to slow its overheating economy.
“So there is a good chance that China’s economy will be looking stronger in a year’s time than it does today,” he said.
On a humorous note, one reporter asked Stevens what his holiday plans were and if there was the possibility of an RBA board meeting in January.
Stevens said he would not be far from the office, but in case an urgent RBA meeting was required, he had the RBA board’s phone numbers.
