By Stella Qiu
SYDNEY (Reuters) – Australia’s home prices rose in August for a sixth straight month as a jump in new listings was absorbed by strong demand, adding to signs that the recovery in the property market is becoming entrenched.
Data from property consultancy CoreLogic showed on Friday prices nationally rose 0.8% in August from July, accelerating from a rise of 0.7% in the earlier month. Since finding a floor in February, national prices have risen 4.9%, following a 9.1% decline from their peak in April last year.
The recovery has been led by Sydney and Brisbane where prices jumped 1.1% and 1.5% respectively.
Regional markets, where there is usually less demand from overseas migration, eked out a gain of 0.1% in August, while the housing values in capital cities across states and territories rose 1%.
The Reserve Bank of Australia (RBA) has jacked up interest rates by a whopping 400 basis points since May last year to tame inflation, but housing prices found a bottom earlier than expected due to short supply and surging migration levels.
Markets are wagering the tightening cycle might now be over, with another hike priced at only a 40% chance. That expectation has also underpinned gains in the property market.
CoreLogic research director Tim Lawless attributed the gains to lower-than-average advertised supply levels.
“The balance between advertised supply and demonstrated demand will be a key factor influencing housing market outcomes in spring,” said Lawless. “A rise in fresh supply without a commensurate lift in purchasing activity would likely take some heat out of the pace of capital gains.”
There are also signs that rents, which have risen for a 36th consecutive month and added to inflation, may be peaking. National rents rose 0.5% in August, the smallest gain since November 2020, according to CoreLogic.
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