Home price rise clouds RBA decision

UPDATE: Home values in Australia's capital cities have risen for a fourth consecutive month.

RP Data-Rismark's September home value index showed property prices rose 1.4% in the month to September across the eight capital cities, led by a strong 2.4% jump in Adelaide.

There was a 2% jump in home values for the September quarter across the capitals, with prices in Darwin soaring almost 4% for the three months.

The Northern Territory capital also recorded the highest rental yields for the quarter at 6% for houses and units.

Year-on-year growth across the capitals improved, but was still in negative territory at -1.2%.

Darwin was also the best performing city for the 12 months, with growth of 2.9%.

Sydney, which was again the most expensive city with a median housing price of $522,000, was the next best-performed for the 12 months on 0.9%.

In Brisbane, dwelling values rose 1.1% for the month and 0.8% for the quarter, but was down 2.5% for the year.

RP Data research director Tim Lawless said the RBA's decision to cut the cash rate significantly mid-year was driving the improving market conditions.

But the RBA's decision to cut the cash rate further on Tuesday would not have been a simple task, he said.

"It's no coincidence that housing market conditions bottomed out at the end of May, after the Reserve Bank cut the official cash rate by 50 basis points," Mr Lawless said. "A further cut of 25 basis points in June and the anticipation of further rate cuts in the pipeline appear to have instilled renewed confidence in the housing market which has driven the growth in home values.

"The bank will want to keep a lid on housing prices from a financial stability perspective, while at the same time ensure interest rates are low enough considering the decline in commodity prices and Australia's terms of trade."

Mr Lawless said other indicators of a housing market recovery were a 10% year-on-year auction rate clearance, smaller vendor discounts in asking prices and lower capital city listings.

Change in dwelling values for each capital city in the September quarter.

1. Darwin: 3.9% ($490,000)
2. Melbourne: 3% ($470,000)
3. Sydney: 2.8% ($522,000 median dwelling value)
4. Adelaide: 1.2% ($370,000)
5. Brisbane: 0.8% ($427,500)
6.Canberra: 0.1% ($489,500)
7. Perth: -1.2% ($450,000)
8. Hobart: -1.8% ($298,000)

OVERALL: 2% ($450,500)

*Source: RP Data-Rismark September index

Topics:  cash rate home prices housing market rba rp data

Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Be the first to see controversial animated children's film

FURRY FRIENDS: Mopsy (Elizabeth Debicki), Flopsy (Margot Robbie), Benjamin, Bea (Rose Byrne), Peter Rabbit (James Corden) and Cottontail (Daisy Ridley) in Columbia Pictures' PETER RABBIT.

Advanced screening of Peter Rabbit in Lismore this weekend

Rosanna has designs on female taboo

Artist Rosanna Pimm uses 3500 porcelain tampons to created her large scale performance installation  Riots of Passage in The Quad  as part of The Lismore Women's Festival on International Women's Day. Laying down and de-constructing the mandala structure symbolises the impermanence of the menstrual cycle and an end to female inequality in the world.

Rosanna has designs on female taboo

Another win for city's calender

NO PROBLEM: Eat The Street.

Another win for city's calender

Local Partners