House prices rise again in September

RP Data-Rismark measure of house prices up 1.4% in September, the fourth
consecutive monthly increase. Gains in all mainland state capital cities
House prices continue to recover. RBA has to weigh that up against the
concerns in other parts of the economy
House prices continue to improve, rising for the fourth consecutive month
in September. The monthly RP Data - Rismark house price series rose 1.4% in
September and prices are up 2.0% over the past three months.
In September, all mainland state capital cities all saw 1%+ increases, with
Adelaide the largest at 2.4%. Perth was up 1.6%, Sydney 1.5%, Melbourne
1.4% and Brisbane 1.1%. In contrast, Hobart, Canberra and Darwin saw price
falls in September.
Looking at the broader trends, the gains in recent months have been led by
Melbourne (+3.0%qoq) and Sydney (+2.8%qoq), while Darwin has also been
strong (+3.9%). The improvement in Melbourne prices has been the most
surprising given the falls earlier in the year ? indeed, in year-to-date
terms Melbourne prices are still down 1.2% so far this year. As can be seen
in the chart below, Darwin, Hobart and Sydney prices have seen the best
improvement in 2012.
House prices have improved in recent months, responding to the 125bps cuts
by the RBA since November 2011. This of course has been noted by the RBA in
recent Statements so it will not be a surprise ahead of today’s meeting.
But the RBA will have to weigh that improvement against the concerns in
other parts of the economic outlook as it decides on rates. Rising house
prices and still low unemployment may be enough to keep them on hold today,
but another cut is likely in coming months. Of course, any additional
interest rate cut will only further support housing demand and house prices
in the December quarter.

Source: NAB
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