House Prices on the Rise

With the lowering of interest rates, the prices of houses have increased.

According to Capital City, the price has increased in June and then in July. Sales, however, have been the slowest recently.

The home price index in June and July increased to 0.1 percent and 0.6 percent, respectively, based on RP Data-Rismark’s data. Tim Lawless, the research director of RP Data further explains that the July results were not broad in scope compared to the results in June.

• Sydney: price rose 1.2 percent

• Melbourne: price rose 1.4 percent

• Perth: price fell 0.5 percent

• Adelaide: price fell 2.5 percent

• Brisbane: price fell 0.4 percent

Since November 2011, banks have been giving interest rate cuts. Commercial banks passed 100 basis points in reduction to borrowers of the 125 basis points the Reserve Bank gave.

Even with the low interest rates, there is still hesitation from the consumers to buy homes as the future looks bleak with the weak domestic economy.

According to RBA’s most recent meeting, the June and July home price index still shows an awakening in the property market. This information is further strengthened by the rise in building approvals at 10.2 percent from the start of the year till June and the rise in property selling to 2.8 percent in June.

A third month sales increase is in the horizon according to Housing Industry Association.

Analysts said that property selling is much better in Sydney compared to Melbourne but the prices in Sydney are still much higher in July at an average of $535,000. In Melbourne, the average cost is at $470,000.