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

Marine Rescue leads to life of memories at sea

BON VOYAGE: Bernie Gabriel reflects on his time in the Marine Rescue NSW Service.

Bernie Gabriel looks back on early days.

Long road ahead to ease pain of stabbing death

Imogen Larter with horse Nelson.

Victim's family tells of heartache, healing

Local Partners

Couple’s big $2 million gamble

The family has loved "stripping back their life" and only travelling with the bare necessities. Picture: Instagram

Tracey and Rob were sick of Sydney life, so they sold their home

The millionaire real estate mogul who rents

Luis D Ortiz, the real estate genius who made millions in New York, then walked away, is on his way to Australia.

The millionaire real estate mogul who prefers to rent

Coffee king forks out $6.5m for Queensland home

Philip and Gianna Di Bella now have a new New Farm at home. Picture: Annette Dew.

Phillip Di Bella has forked out $6.5 million for a New Farm home

Rare look inside ghostly abandoned casino

Photojournalist Jakub Kyncl managed to get inside Romania’s creepy old Constanta Casino. Picture: Jakub Kyncl

The haunting remains of Romania’s grandest casino