Aussie house price moves mirror UK

The housing markets in Australia and the UK continue to slow, having both witnessed substantial house price booms over the past decade, the Royal Institution of Chartered Surveyors says. House prices have risen 122% in Australia and 170% in the UK since 1996 Q2. In the second quarter, house price inflation in Australia went negative for the first time since the first quarter of 1996. The slowdown has been abrupt. It was only 18 months ago that prices were rising at an annual rate of 19%. The situation in the UK is similar, with prices rising at an annual rate of 25% at the end of 2002. Now the annual rate of increase has fallen to 4% according to ODPM statistics for July. Prices have stagnated for the past three quarters. But the experience of Australia suggests that the UK does not face a substantial drop in prices.

Meanwhile, the upswing in US house prices continues to gather pace with prices nationwide 13.4% higher in Q2 than they were this time last year, the fastest increase ever recorded. There are now 25 US states in which prices are rising above 10% per year, eight of which are recording rises of above 20%.