House Prices Rise
The RP-Data-Rismark Home Value Index recorded a typical one per cent rise in home values across the eight capitals in June, partially reversing a 5.3 percent fall in the Twelve months to May.
It had been the biggest rise in home values since March 2010.
RP Data research director Tim Lawless said the Reserve Bank of Australia’s May and June official rate of interest cuts had helped spur demand within the property market.
The RBA cut the money rate by 0.50 percentage points in May and 25 percentage points in June, taking it to three.50 per cent.
Mr Lawless said major banks had handed down most of the recent rate cuts for their customers.
“The catalyst for improvement in market conditions will probably have been the 55 basis point (0.55 percentage points) decrease in the average discounted home rate over May and June,” he explained.
Rismark chief executive Ben Skilbeck said the number of house prices to income levels was at its minimum since 2003, meaning the home market had become less expensive.
He said further rate of interest cuts would send prices higher.
“The rebound in capital prices during June suggests that the RBA’s relaxed monetary policy stance might have reached the point of inflating asset prices,” he explained.
“If interest rates continue to be pushed lower, asset prices will in the end respond to stimulus.”
Most economists surveyed by AAP on Friday expected the RBA to chop by between 0.25 and 0.75 percentage points within the next six months.
The RP Data survey found Hobart recorded the sharpest increases, with prices climbing 2.7 percent, followed by Perth and Canberra where prices rose two percent.
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