Australia Home Prices Seen Rising 10% on Rate Cuts: Mortgages

Australia’s flagging property market is poised to get a boost from record low interest rates and a housing shortage that could boost prices by as much as 10 percent this year.

The Reserve Bank of Australia has cut the cash rate by 1.75 percentage points since November 2011 to match a 50-year low, which has helped reduce standard variable mortgage costs to 6.65 percent in November, the lowest in almost two years, central bank data show. Traders are betting on a 50 percent chance the central bank will drop the rate a quarter point to 2.75 percent by March, interest-rate swap prices compiled by Bloomberg show.