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Australia home prices keep rising, surge in Sydney
[SYDNEY] Home prices across Australia's capital cities edged higher in February as the Sydney market extended its blistering run in what is increasingly becoming a headache for policy makers.
Figures from property consultant CoreLogic RPData showed dwelling prices across all of Australia's major cities rose 0.3 per cent in February from January, to be 8.3 per cent higher than a year earlier.
The modest overall move belied wide differences between cities with Sydney prices surging 1.4 per cent in the month to be 13.7 per cent higher for the year. In contrast, prices in Perth, Brisbane and Hobart all fell in February.
The strength in Sydney is an unwelcome complication for the Reserve Bank of Australia (RBA) which is under pressure to cut interest rates again to help offset lower export prices and a round of policy easing across the globe.
The central bank holds its March meeting on Tuesday amid much speculation it will follow February's rate cut with another quarter point easing to 2 per cent.
Rising home prices have been seen as necessary to encourage a much-needed revival in home building, but the RBA has been less pleased by debt-fuelled property speculation in the inner cities of Sydney and Melbourne.
Monday's data showed home prices in Melbourne climbed 4.5 per cent over the three months to February, to be up 7.4 per cent for the year.
RP Data's head of research, Tim Lawless, noted prices had risen 22.6 per cent across all the capitals since the latest growth cycle began in June 2012. "We are already seeing the effect of lower mortgage rates, with auction clearance rates surging to the highest levels we have seen since 2009," said Lawless.
Regulators have already tightened their coverage of bank lending standards for property investment and could adopt more macroprudential measures in coming months to cool the market.