The Reserve Bank of Australia is confident that house prices can survive and fare better here than overseas. Lower rates, boosts to the first home owner grant and better housing affordability mean that Australian house prices can stand their ground.
The vote of confidence from the RBA has stoked speculation over possible further rate cuts in April.
The RBA's deputy governor Ric Battellino says that the majority of Australian's who have taken out mortgages have been managing their repayments well.
"We continue to believe that the market here will hold up better than overseas,'' Mr Battellino said in a speech to the Urban Development Institute of Australia in Brisbane.
"There are a number of reasons why this is likely to be so, but perhaps the most important is that we did not have the same deterioration in lending standards that occurred elsewhere.''
Australian property prices fell a small 3% in 2008, and when you compare that with the US and the UK which saw a drop of 20% local housing markets have stood up, due to less defaults.
The demand for new homes has been strong said the HIA yesterday, infact national sales for new homes grew by 3.9% in February 2009, the second consecutive monthly increase.
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