Australian property prices have scaled new record highs as demand for housing offsets buyer concerns about the Reserve Bank’s shock call to hold interest rates steady in July. National home values rose 0.6 per cent in July, marking the sixth consecutive monthly increase, according to figures from property research firm Cotality (formerly CoreLogic). The median home value is now $844,000, an increase of 3.7 per cent in a year.
Darwin led the monthly gains, followed by Perth, Adelaide, Brisbane, Sydney, the regions, Canberra, Melbourne and Hobart. Cotality head of research, Eliza Owen, said the price “growth started with the cash rate being reduced in February.” The rise in property prices comes despite the RBA’s decision in early July to hold the cash rate at 3.85 per cent. However, with inflation continuing to slow, a rate cut is now widely expected when the RBA’s board meets on August 12. The correlation between rate cuts and house price growth was something Melbourne real estate agent Matthew John was attuned to. Mr John said optimism about future rate cuts had already started to flow through to the amount buyers were willing to pay. AMP chief economist Shane Oliver thinks the Australian property market could be reaching its price peak because of affordability constraints.
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