Australian House Prices Rise Most Since Mid-2010 on Rate Cuts
Australian house prices rose last quarter by the most since June 2010 as lower interest rates lured buyers back into the market.
An index measuring the weighted average of prices for established houses in eight major cities advanced 1.6 percent from the previous three months, when it fell a revised 0.1 percent, the Australian Bureau of Statistics said in Sydney today. The median estimate of 15 economists surveyed by Bloomberg News was a 0.3 percent rise. Prices rose 2.1 percent from a year earlier.
Standard variable home-loan costs were at about 6.45 percent as of Jan. 31, the lowest since November 2009, after the Reserve Bank of Australia reduced its cash rate by 1.75 percentage points from November 2011 to December. Governor Glenn Stevens will probably keep borrowing costs unchanged at today’s meeting as an improved global outlook boosts Australian commodity prices, a survey of economists showed.
“Prices were boosted substantially in the fourth quarter by greater turnover in the top end of the market,” Stephen Walters, JPMorgan Chase & Co.’s chief economist in Australia who predicted a 0.8 percent increase, said in a research report before the release.
Prices rose 2.3 percent in Sydney, 2.9 percent in Perth and 2.6 percent in Darwin in the fourth quarter from the prior three months, the report showed. Prices declined 1.4 percent in Hobart, the only one of the eight capital cities to record a drop, it showed.
The local dollar traded at $1.0455 at 11:43 a.m. in Sydney, compared with $1.0442 before the report.
The RBA reduced its overnight cash-rate target to 3 percent in December, matching a half-century low.
To contact the reporter on this story: Michael Heath in Sydney at email@example.com
To contact the editor responsible for this story: Stephanie Phang at firstname.lastname@example.org