Figures released this week by the Australian Bureau of Statistics (ABS) show that house prices kept increasing at a higher-than-expected pace in the quarter to June. Analysts project that growth in property values is unlikely to slow down any time soon, the Big Pond News reports.
Capital city house prices in Australia advanced 2.4% in the three months to June, exceeding analysts’ forecasts for a more modest increase of 1%. In the six months to June, the housing market observed a 5.1% spike in values.
House prices increased the most in Perth, where the ABS observed a 3.4% growth in the quarter. Next came Darwin with a 2.9% increase in prices, followed by Sydney with 2.7%, Melbourne with 2.4% and Brisbane with 1.9%. The property markets of Canberra and Adelaide showed a modest growth, seeing prices climb by just 1% and 0.3%, respectively. Hobart was the only market to see a decline in house prices, slipping 1% in the June quarter.
The figures come soon after the RBA announced yet another reduction of its cash rate, slashing it to a historic low of 2.5%. The bank attributed the reduction to sluggish economic growth and moderating commodity prices. According to JP Morgan economist Tom Kennedy, the RBA has made it quite clear it is seeking a recovery in the housing market to counterbalance dwindling resource investment. The expert projects that the housing sector will keep performing well in the short run, thanks to the low interest rate and investors’ increasing appetite for Australian property and the strong yields it generates.