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The Real Estate Institute of Australia
16 Thesiger Court Deakin ACT 2600
02 6282 4277 I www.reia.com.au

Media Release
Tuesday 19 April 2011
_______________________________________________________________________________________

Decreased house prices can be attributed to natural cycle

Real Estate Institute of Australia (REIA) President, Mr David Airey appeared on ABC’s Business
Lateline last night to shed some light on the state of the Australian housing market and a slight
softening of house prices.

REIA is yet to release its review of Australian house prices, REIA Real Estate Market Facts, for the
first quarter of 2011, however, state and territory figures are showing evidence of decreases in
house prices.

“It is important to understand that house prices, whilst increasing over time, have periods when
price growth either subsides or decreases, however, over time the fundamentals are there for
continued growth. The drivers for this growth will come from lack of supply, population growth and
changes in the household formation rate,” Mr Airey said.

In the Reserve Bank Minutes of the Monetary Policy Meeting released today, the RBA board
comment on a slight but not worrying change in prices, saying, “Conditions in the housing market
remained subdued, with housing prices down slightly over the first two months of the year and
auction clearance rates a little below average.”

“The current lower activity levels have to be seen in the context of the increased buyer levels
during 2009 and the earlier part of 2010. Lower interest rates post GFC stimulated interest in
house buyers,” Mr Airey continued.

The temporary slowdown in housing price growth can be attributed to a number of reasons,
including:

• A more conservative outlook by home buyers, reflecting concerns about economic growth
in the two-speed economy.
• Increased savings reflecting an aversion to debt in the current economic circumstances.
• Affordability reaching a record low.
• Seven interest rates increases.
• A retraction of first home buyers from the market – the group which provides the catalyst
for other buyers to trade-up.

The Real Estate Institute of Australia (REIA) is the national professional association for the
real estate sector in Australia. For further information or interview opportunities, please
contact:

David Airey REIA President 0418 906 002
Amanda Lynch REIA CEO 0419 123 862
Rhiannon McClelland REIA Manager Communications 0421 422 919

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