Treasury unfazed by declining house prices

Marnie Banger
(Australian Associated Press)

 

The changing state of Australia’s housing market may be occupying the minds of many property owners, but cooling prices in big cities are not worrying Treasury.

House prices fell by 4.8 per cent nationally in 2018, according to CoreLogic data, and are expected to continue declining this year.

But Treasury secretary Philip Gaetjens says as long as prices don’t drop steeply, his department isn’t stressed.

“As long as it’s not a sharp correction, I don’t think it’s a problem,” he told a Senate estimates hearing on Wednesday.

“I don’t think from a policy point of view, there’s much concern.”

Mr Gaetjens said all housing markets go through cycles, with prices in Sydney and Melbourne climbing in recent years amid high demand.

That caused some issues for people wanting to buy their first property and regulators monitoring the quality of credit lenders were offering.

The Treasury boss said recent price declines reflect efforts by regulators such as the Australian Prudential Regulation Authority to improve the quality of credit offered.

“We’re looking at results that I think are consistent with the policy objectives of those regulators.”

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