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Reserve Bank of Australia's Ellis says new housing price boom unlikely

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Investing.com -

Investing.com - House prices in Australia are unlikely to experience the boom seen in 2002-2003, said Luci Ellis, the Reserve Bank of Australia's head of financial stability, in a

speech in Sydney on Thursday.

"As we have said many times in the past, the 15 years or so to about 2005 saw housing prices rise noticeably faster than incomes. This was in large part a transition to a new equilibrium of lower inflation and interest rates, and thus higher debt and housing prices relative to incomes. That transition is over now," Ellis said.

"There is less scope for rising markets to cover over your mistake if you fall in love with a property and overpay for it. At an aggregate level, it means there is little room for another round of property exuberance of the type we saw just over a decade ago, in 2002 and 2003."

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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