Australian home prices climbed by the most in 30 months in September as the central bank’s rate cutting measures took effect, according to RP Data.
House and apartment prices across Australia’s eight state and territory capitals rose 1.4 percent in September from the previous month, the most since March 2010, the RP Data-Rismark Home Value Index showed. They also rose 2 percent in the three months ended Sept. 30 from the prior quarter, the Brisbane-based researcher said.
“It’s no coincidence that housing market conditions bottomed out at the end of May, after the Reserve Bank cut the official cash rate by 50 basis points,” Tim Lawless, research director at RP Data, said in an e-mailed release. “A further cut of 25 basis points in June and the anticipation of further rate cuts in the pipeline appear to have instilled renewed confidence in the housing market.”
Traders are pricing in a 79 percent chance the central bank will cut its overnight cash-rate target by a quarter percentage point to 3.25 percent today, after reducing it by 125 basis points since November. That has helped push three-year fixed mortgage rates as low as 5.39 percent, compared with 5.6 percent following the collapse of Lehman Brothers Holdings Inc., Ben Skilbeck, chief executive officer of Rismark International, said in the release.
Adelaide and Perth had the biggest monthly increase, rising by 2.4 percent and 1.6 percent, respectively. Darwin and Canberra posted the biggest declines, falling 2 percent and 0.6 percent, the figures show.
Prices across the eight cities will climb as much as 3 percent in 2012 and between 4 percent and 7 percent next year, as rate cuts, both past and anticipated, boost home prices, Sydney-based SQM Research forecast last month.