Australian House Price Value Unlikely to Drop: RBA

28 Jun 2012 - Phillip Tarrant from http://www.spionline.com.au

Australian house prices won’t plunge, a senior Reserve Bank of Australia (RBA) has said.

According to a report from AAP, RBA assistant governor (financial markets) Guy Debelle said a sharp drop in house prices in parts of Europe doesn’t concern him.

Talking to a mortgage and finance industry lunch in Adelaide, Mr Debelle said he was comfortable with how Australians were managing their debt levels, and that there wasn’t an oversupply of houses, AAP reported.

Europe did cause him some angst, however.

“I think the day of reckoning is going to happen in Europe ... but nobody knows how it will play out,” he said, according to AAP.

“It is in the hands of Europe's leaders.”

Dr Debelle also told the audience that housing credit growth in Australia was rising at the same rate as household income, AAP continued, and that the biggest issue for banks in the next year was getting used to mid single-digit lending growth.