Aus­tralian house prices ad­vance in min­ing states

The Pak Banker - - Front Page -

SYDNEY

Aus­tralian home prices rose for a sec­ond straight quar­ter, the first back-to-back in­crease since 2010, led by gains in the cap­i­tals of states at the cen­ter of the na­tion's min­ing boom.

An in­dex mea­sur­ing the weighted av­er­age of house prices in eight ma­jor cities ad­vanced 0.3 per­cent in the third quar­ter from the pre­vi­ous three months, when it rose a re­vised 0.6 per­cent, the Aus­tralian Bureau of Sta­tis­tics said in Sydney to­day. The me­dian es­ti­mate of 15 economists sur­veyed by Bloomberg News was a 1 per­cent rise.

The data re­flects 1.25 per­cent­age points of in­ter­est rate cuts by the RBA from Novem­ber to June, which have helped boost con­sumer con­fi­dence, home lend­ing and build­ing ap­provals. Gover­nor Glenn Stevens re­sumed re­duc­tions in bor­row­ing costs last month, as he seeks to strengthen ar­eas out­side the re­sources in­dus­try -- where in­vest­ment is expected to peak at a lower level than pre­vi­ously expected next year -and traders are pric­ing in a 50-50 chance of a rate cut to­day.

"Al­though it was be­low ex­pec­ta­tions, the data does pro­vide fur­ther ev­i­dence of a sta­bi­liza­tion in house prices," said Janu Chan, an econ­o­mist at St. Ge­orge Bank Ltd. in Sydney. " The out­look for hous­ing is promis­ing, given that the lower bor­row­ing costs are hav­ing an im­pact and the Re­serve Bank of Aus­tralia has hinted that it wants hous­ing to im­prove and that's sug­gest­ing that it will ad­just mone­tary pol­icy to do so."

Prices rose 1.8 per­cent in Perth, 0.4 per­cent in Bris­bane and 0.3 per­cent in Sydney in the third quar­ter from the prior three months, the re­port showed. They de­clined 1.1 per­cent in Canberra and dropped 0.6 per­cent in Ade­laide, it showed.

"Lower-than-av­er­age in­ter­est rates are pro­vid­ing some sup­port to de­mand in the econ­omy," RBA Deputy Gover­nor Philip Lowe said in an Oct. 30 speech. "There is also some sign that they have led to a slight im­prove­ment in the prop­erty mar­ket."

Prices climbed 0.3 per­cent in the Septem­ber quar­ter from a year ago, to­day's fig­ures showed. Dar­win rose the most, jump­ing 8.2 per­cent, fol­lowed by Perth with a 4.4 per­cent gain. Mel­bourne saw the big­gest drop, at 2.3 per­cent, the seventh straight quar­ter of de­clines, the data showed.

Home and apart­ment prices fell 1 per­cent in Oc­to­ber, fol­low­ing four months of gains, high­light­ing a "del­i­cately bal­anced" mar­ket, Bris­bane- based re­searcher RP Data said last week. Prices of de­tached houses slipped 1 per­cent in Oc­to­ber, while apart­ment prices slid 0.6 per­cent, it said.

The num­ber of per­mits granted to build or ren­o­vate houses and apart­ments surged 12 per­cent in Septem­ber from a year ear­lier, and climbed 7.8 per­cent from Au­gust, statis- tics bureau data showed.

Con­sumer con­fi­dence in the na­tion rose 1 per­cent to 99.2, the West­pac Bank­ing Corp. and Mel­bourne In­sti­tute sur­vey taken dur­ing the first week of Oc­to­ber showed. Aus­tralian home loan ap­provals gained 1.8 per­cent in Au­gust from the prior month, the most since Novem­ber 2011, as buy­ers re­sponded to the RBA's in­ter­est rate cuts.

" The Re­serve Bank of Aus­tralia are aware that there are pre­lim­i­nary signs of life in the hous­ing mar­ket," Ben Jar­man, a Sydney- based econ­o­mist at JPMor­gan Chase & Co., said in an e- mail. "But con­di­tions cer­tainly aren't strong enough yet to con­strain them from cut­ting rates fur­ther."

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