SYDNEY: Australian home prices extended their steady rise to hit another record high in July as low housing supply boosted auction clearance rates, while expectations of lower rate cuts ahead are set to lift prices more this year, data showed on Friday.
Figures from property consultant Cotality showed national home prices rose 0.6% to A$844,197 ($542,397) in July, the sixth straight month of gains. That compared with a 0.6% rise in June and brought the annual growth to 3.7%.
“The outlook for housing values remains positive,” Cotality’s Research Director Tim Lawless said in a note.
“We expect values to continue posting a broad-based but modest rise through the rest of the year, supported by an outlook for lower interest rates, improving sentiment and short housing supply.”
But he said the pace of growth “is no longer accelerating” as prices run up against stretched valuations, affordability constraints and lingering uncertainty.
Every major city recorded a price increase through the month, led by Darwin with a 2.2% rise and followed by Perth, up 0.9%. Sydney clocked a 0.6% rise lifting the median house prices in Australia‘s largest city to A$1.23 million ($790,275).
That should trend upwards through the year after data showed on Wednesday that Australian consumer prices grew at the slowest pace in over four years in the June quarter. Core inflation now sits firmly around the mid-point of the central bank’s range and cemented market wagers for a cut in interest rates this month.
Lawless said consumer sentiment looked more positive as cost-of-living pressures ease and the cash rate moves lower.
“Historically, consumer sentiment and housing activity have shown a close relationship,” he added.
