Australian residential property prices continued to rise, according to new data, revealing record levels of growth in the three months to June.
The Australian Bureau of Statistics (ABS) revealed on Tuesday that home prices rose 6.7 percent – the strongest quarterly growth figure since the ABS tracked data in 2003.
“The continued rise in property prices was occurring at a time of record-low interest rates. The stock’s persistently low levels in the market were driven by strong demand and increasingly fast-transacting properties,” said ABS Head of Price Statistics Michel Marquardt. was being completed.
Homes in the capital city increased by a combined 7.7 per cent, with Canberra experiencing the highest jump (8.2 per cent), followed by Sydney (8.1 per cent). However, Perth and Darwin had comparatively muted price movements, with both regions rising just under 5 percent, the lowest among capital cities.
The total value of residential properties increased by $596.4 billion (US$439.37 billion) to $8,924.6 billion in the June quarter, the biggest quarterly increase on record.
However, the ABS noted that these figures reflect the level of increase in home prices before the start of the extended lockdown in Australia’s two largest states, New South Wales and Victoria.
According to data from property researcher CoreLogic, residential housing values rose just 1.5 percent in August, the lowest monthly increase since January.
This shows that the market is cooling off after an annual growth rate of 18.4 percent, according to CoreLogic research. In comparison, ABS figures show a 1.7 per cent increase in salaries year-on-year.
Tim Lawless, director of research at CoreLogic, said the slowing growth rate is not due to the extended lockdown, but to deteriorating affordability.
“Housing prices have risen nearly 11 times faster than wage increases over the past year, posing a more significant barrier to entry for those who do not yet own a home,” Lawless said. “The lockdown is having a clear impact on consumer sentiment. However, to date, the restrictions have resulted in falling advertised listings and, to a lesser extent, lower home sales, with little effect on the pace of price increases.
Experts expected the Reserve Bank of Australia (RBA) to curb the rise in home prices by raising the official interest rate, but the RBA has repeatedly dismissed that sentiment.
“While it is true that higher interest rates, all else equal, will drive down housing prices, they will also mean fewer jobs and lower wage growth,” RBA Governor Philip Lowe said on Tuesday. “It’s a bad trade under the current circumstances.”
Lowe said raising interest rates was not the best solution for dealing with home price issues. They believe that structural factors such as the tax system, planning and zoning restrictions, and the nature of the transportation network were better ways to address these concerns.
“All of these are clearly areas outside the domain of monetary policy and central banks,” Lowe said. “Our job is to achieve the inflation target and support the return to full employment in Australia.”
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This News Originally From – The Epoch Times
