Australian residential property sales drying up

MacroBusiness, an Australian economics blog, alerted me to the fact that the Australian property market is seeing transaction volume fall. They quote preliminary sales data for 2012 from the Real Estate Institute of Victoria saying that 69,000 home sales were registered last year. While that is a fall of only 3,000 from the 2011, MacroBusiness notes that it is the lowest home sales level since 1996. The dropoff in home sales is consistent with the drop of home prices nationwide. Steve Keen says prices peaked in June 2010 and are off 4.1 in nominal and 9.8% in real terms since then. The housing-bullish crowd predicts price rises for 2013 though.
My understanding of the Australian property market is that it is similar to the UK and Spanish markets in that local governments benefit from high...


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