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Australia's housing market has recorded its fastest growth in a year, driven by interest rate cuts, limited listings, and strong buyer demand. National home prices rose 0.8% to a record A$857,280 (USD 565,462), with Brisbane and Perth seeing the largest gains. Growth has shifted to the middle of the market as borrowing capacity improves. Recent government policies allowing first-home buyers to enter the market with minimal deposits, coupled with a tightening rental sector, suggest sustained upward pressure on prices. Despite steady rates, economic uncertainty and inflation remain factors influencing future market trends.
Australian home prices climbed at their fastest pace in a year, driven by recent interest rate cuts and low property listings, according to property consultant Cotality. National home values rose 0.8% to reach a record median of AUD 857,280 (USD 565,462), marking the strongest monthly increase since last October. Over the quarter, prices advanced 2.2%, compared with a 1.5% rise in the previous quarter. Advertisement
The increase was widespread across major cities. Brisbane saw a 1.2% rise, Perth led with a 1.6% gain, while Sydney recorded a 0.8% increase. Melbourne's growth was slightly lower at 0.5%. Cotality noted that sellers are increasingly taking control of the market, supported by limited stock and strong buyer interest, a combination likely to push prices higher through spring and into the year-end.
The fastest growth has shifted from the lower quartile to the broader middle of the market, reflecting improved borrowing capacity as interest rates fell. The Reserve Bank of Australia kept rates steady at 3.60% recently, following three reductions this year aimed at supporting the economy amid slowing inflation. However, the central bank has indicated that inflation may be higher than expected for the recent quarter and that economic conditions remain uncertain.
Government measures are also expected to boost demand further. A new Labor policy allowing first-home buyers to enter the market with a 5% deposit came into effect recently, providing an additional push to home purchases. The rental market is showing signs of tightening as well. National vacancy rates dropped to a record low, and rents increased 0.5% from the previous month, resulting in a quarterly rise of 1.4%, the highest since last June.
Source Reuters
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