Housing bubble bursts: RBA By David Uren
08may 2004 THE housing bubble has burst, with property prices falling by an average 8.4per cent in the March quarter, according to the Reserve Bank, confirming that interest rates will remain stable for months.The bank cited preliminary private research showing house prices dropped by
14.5per cent in Melbourne and 10.5per cent in Sydney in the March quarter.Price falls were 1per cent or less in other capitals, except in Adelaide, where they rose 2.7per cent. Based on official estimates of the value of all dwellings in Australia, an 8.4 per cent fall in housing prices amounts more than a $60 billion loss in capital value.
"A turning point has been reached in the housing market after the overheated levels of late last year," the bank said yesterday in its quarterly statement on monetary policy.
Housing Industry Association senior economist Harley Dale said all the signs were that prices had slipped on a widespread front.
"I'd be surprised if there was anyone in the industry that would disagree with the Reserve Bank view on this," Mr Dale said.
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