Costello wants Australia's house prices to plateau

"We would prefer to see a plateau in relation to house prices so that the market takes a bit of a pause and catches breath and is more sustainable over the years to come," Costello told reporters in the southern island state of Tasmania.

"My view has been for 18 months to two years that the level of increase in house prices would not continue. In fact, you wouldn't want it to continue," said Costello, according to Australian Associated Press.

Australia's central bank said on Thursday that home prices fell in the six months since it raised interest rates, suggesting policy makers will be in no hurry to tighten credit again. Data from a variety of industry sources suggested the decline was driven by price falls in Melbourne and Sydney, the country's two largest cities, the Reserve Bank of Australia said.

Read More - Opens in a new window