Look what’s happened to house prices over the last months.
According to RPData capital city property markets have recorded their strongest gain in more than 2 ½ years, rising for the fourth consecutive month in September.
The monthly RP Data – Rismark house price series rose 1.4% in September and prices are up 2.0% in quarterly terms.
In contrast, Hobart,Canberra and Darwin saw price falls in September.
Looking at the broader trends, the gains in recent months have been led by Melbourne (+3.0%qoq) and Sydney (+2.8%qoq), while Darwin has also been strong (+3.9%).
The improvement in Melbourne prices has been the surprising given the falls earlier in the year – indeed, in year to-date terms Melbourne prices are still down 1.2% so far this year.
As can be seen in the chart below, Darwin, Hobart and Sydney prices have seen the best improvement in 2012.
House prices have improved in recent months, responding to the 125bps cuts by the RBA since November 2011.
This of course has been noted by the RBA in recent Statements so it will not be a surprise ahead of today’s meeting. But the RBA will have to weigh that improvement against the concerns in other parts of the economic outlook as it decides on rates.
Rising house prices and still low unemployment may be enough to keep them on hold today, but another cut is likely in coming months. Of course, any additional interest rate cut will only further support housing demand and house prices in the December quarter.
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