Australia is not going to experience a US style collapse in house prices, says Luci Ellis, head of the Reserve Bank‘s financial stability department. Acknowledging that house prices fell 5% last year, Luci said, in an article in todays AFR, that “Australia was not in danger of entering the disastrous downward spiral in asset values that the US, Britain and other countries suffered and which destabilised the global financial system in late 2008″.
She warned that, with low inflation, Australians should get used to house prices having periods in which prices fell, as well as periods in which prices went up.
