Australian Home Prices Rise Again

SYDNEY (Reuters) – Australian home prices nudged higher in August, marking the 19th consecutive monthly rise, although data shows signs of slowing growth.

Figures from property consultant CoreLogic indicate that national home prices rose by 0.5% in August, slightly above the downwardly revised 0.3% rise in July. Prices continue to reach record highs since bottoming out early last year, now up 7.1% from a year ago.

However, CoreLogic reports a quarterly increase of 1.3%, which is less than half the growth rate for the same period last year. Eliza Owen, CoreLogic’s Head of Research, noted, “While seasonality may have contributed to weaker value growth through winter, affordability constraints are a key factor behind the broader slowdown.”

Despite this, demand for housing exceeds supply, although the market is becoming “increasingly balanced,” Owen added.

Price increases varied across cities; Perth saw a 2.0% rise, followed by 1.4% in Adelaide and 1.1% in Brisbane. Sydney experienced a modest 0.3% rise, while prices dipped in Canberra, Melbourne, Darwin, and Hobart.

A recent Reuters poll indicates that average home prices in Australia are expected to rise more than 6% this year, though a slight moderation is anticipated in subsequent years.

Since May 2022, the Reserve Bank of Australia has raised interest rates by 425 basis points to control inflation, but gains in the real estate market have surpassed expectations due to record immigration and limited housing supply.

Markets currently price in a 78% probability of an interest rate easing by the end of the year.