Australia home prices sustain growth in April, CoreLogic says
Australian home prices climbed with a rapid pace in April, driven by gains in the most affordable segments of the market and a persistent shortage of supply trumped concerns about interest rates and rising prices of living.
CoreLogic released data on May 1, revealing that the cost of living in the United States increased by 0.6% in April. The increase was similar to the gains that were that were seen in March and February. In 2023, they’ll have already increased by 8.1 percent to hit the previous high.
In April, price increases were mainly caused by the rise of 2 percent in Perth and a hike of 1.3 percent in Adelaide. Both cities are cheaper. Sydney prices increased by 0.4 percent and Melbourne’s prices fell by 0.1 percent.
CoreLogic found that almost every capital city is recording stronger growth across the lower value segment of the market.
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“The persistent rise in housing values, despite a myriad of negative factors that normally push prices lower, could be traced back to the lack of supply of housing relative to the demand” it said.
Even though sticky inflation has risen in the country, it has also raised the possibility that interest rates could remain at a high level for a while, “housing values are likely to be propped up due to the inconsistency between demand and supply which doesn’t appear as if it’s going to be changing anytime soon” CoreLogic said. CoreLogic.
The Reserve Bank of Australia has increased rates of interest by 425 basis point to combat the sky-high inflation since the beginning of May 2022. But, the tightening of the rate has not been able to stop the exuberance of the market for housing.
This could mean that financial conditions aren’t so tight as the RBA would like, since it has kept rates steady for three consecutive meeting. The markets are betting the possibility of another rate hike by September. REUTERS
