AUSTRALIAN house prices rose for the first time in 11 months in the wake of the recent interest rate cuts, indicating that the housing market might have started to stabilise.
The RPData-Rismark capital city home value index rose 0.1 per cent in November from October, while home values in regional Australia rose 0.3 per cent.
The Reserve Bank of Australia cut its benchmark cash rate by 0.25 per cent to 4.5 per cent in November in response to growing global concerns over the fallout from the deepening European sovereign debt crisis.
Rismark director Christopher Joyce said the result reflected the effect of the first rate cut in November.
“If the second cut in December was fully passed on by banks, we expect a healthy recovery in the first quarter (of 2012),” he said.
Mr Joyce said latest figures released by the RBA showed that housing credit grew by 0.5 per cent, or 6 per cent in annualised terms. Housing credit growth tracked the growth in household incomes, he said.
According to the Australian Bureau of Statistics, Australian disposable household incomes grew between 8 per cent and 9 per cent up to last September.
“Broadly speaking, household incomes rise between 4 and 6 per cent throughout the cycles,” he said.
According to the RPData-Rismark data, Sydney house prices stopped falling in November and the median price of purchases settled over the quarter was $495,000.
Perth showed the highest gain, at 0.5 per cent, followed by Canberra with 0.4 per cent and Melbourne at 0.2 per cent.
Brisbane house prices dropped 0.7 per cent while Darwin was down 0.9 per cent and Adelaide fell 0.3 per cent.
“Today’s rise in Australian capital city house prices is proof that the RBA’s rate cuts have had a real impact on immediate market recovery,” said Mark Bouris, chairman of financial services group Yellow Brick Road.
Mr Bouris said the November data showed that the market had responded quickly to the RBA’s decisions.
“This rise is a step in the right direction and a much needed confidence builder for deflated Australian home owners.”
In fact, the RPData-Rismark index result mirrored the recent activity on a street level through the group’s network of branches, said Mr Bouris.
Century 21 Australia chairman and owner Charles Tarbey, who last week acquired micro-listed company Wentworth Holdings, said he had seen a decline in the number of listings nationally for the first time in two years.
“In recent weeks, the backlog of listings has been cleared,” he said, adding that he now expected a spike in the number of transactions in the first quarter.
Mr Tarbey said vacancies had fallen to below 2 per cent. Rents had reached a level in line with mortgage repayments, he said.