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Property prices are finally on the rise after two consecutive rate cuts ended a year of decline in 2011
THE RESERVE Bank of Australia’s decision to cut the cash rate in both November and December has spurred a dormant property market into action.
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Research from RP Data found capital city home values rose by 0.1 per cent in November, suggesting buyers are starting to re-enter the market after 12 months of sitting on the sidelines.
The modest increase in metro values however was surpassed by Australia’s regional markets, where values recorded a solid increase, with property prices growing 0.3 per cent.
Rismark director Christopher Joye said the growth, which is the best monthly result since December 2010, augurs well for housing activity during the first quarter of 2012.
“The best proxy for housing demand – the number of new home loans approved for purchasing established properties – has risen robustly every month since its nadir in March,” he said.
According to Mr Joye, the November result has helped improve the Australian housing market’s year-to-date performance.
Whereas in October RP Data-Rismark reported that capital city dwelling values had declined by four per cent in the first 10 months of 2011, the November year-to-date index has now fallen by 3.7 per cent.
Better yet, in actual raw terms, Australian capital city dwelling values have only declined by 2.8 per cent in the first 11 months of 2011.
Over the year to November 2011, regional house values are only off by 2.6 per cent in raw terms (or 2.8 per cent seasonally-adjusted).
RP Data’s senior research analyst Cameron Kusher said this data shows there is significant diversity across capital city housing markets.
“Although home values have fallen across each capital city, Sydney and Canberra have been the most resilient with dwelling values falling by just 0.5 per cent and 1.6 per cent over the year, respectively” Mr Kusher said.
“On the other hand, Brisbane and Melbourne home values have recorded total declines of seven per cent and 5.6 per cent, respectively.”
