House price attrition is natural part of the property cycle, Real Estate Institute of Australia’s president David Airey has claimed.
Mr Airey’s comments follow several months of weak results for house price growth as well as forecasts for little growth in the year ahead.
“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,” he said.
“The drivers for this growth will come from lack of supply, population growth and changes in the household formation rate.”
Mr Airey the current lower activity levels should be seen in the context of the increased buyer levels during 2009 and the earlier part of 2010.
"The temporary slowdown in housing price growth can be attributed to a number of reasons, including a more conservative outlook by home buyers, increased savings reflecting an aversion to debt and seven interest rate increases in the last few years,” he said.
“In addition, the decreased activity can be attributed to a retraction of first home buyers from the market – the group which provides the catalyst for other buyers to trade-up.”