Australia’s construction cycle is below its peak and remains positive, according to Deutsche Bank.


“There are now understandable concerns that Sydney house prices are too high, and that a slowing is in prospect,” says Deutsche Bank equity analyst Tim Baker.


But he said falling auction clearance rates in Sydney were evidence of a slowing rather than outright falls.


Historically, falling house prices are uncommon in Australia. Periods of growth have been followed by years of sideways price action.


“We are not certain why this time should be different. It’s true that debt levels are high compared to history, but the interest burden isn’t,” Baker said.