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Australia home prices rise broadly in April
[SYDNEY] Home prices across Australia's capital cities rose further in April with gains broadening out from the red-hot Sydney market, a headache for policy makers considering whether to cut interest rates to new lows in the coming week.
Figures from property consultant CoreLogic RP Data showed dwelling prices across all of Australia's major cities climbed 0.8 per cent in April, from March when they rose 1.4 per cent. Annual growth in prices picked up to 7.9 per cent, from 7.4 per cent.
Sydney has outpaced its sister cities in recent months and boasted another solid rise of 1.0 per cent in April, to be up 14.5 per cent year-on-year. Sydney dwelling values are now up 40.2 per cent on the trough struck in May 2012.
Yet the gains were broader in April with both Adelaide and Hobart jumping 1.6 per cent, Melbourne up 0.8 per cent and Brisbane and Perth rising 0.6 per cent.
That was a marked contrast to housing outside the major cities, where prices fell 0.4 per cent in the month to be up just 1.5 per cent on the year.
The scale of speculative demand for housing has unsettled the Reserve Bank of Australia (RBA) which fears it could ultimately push price to peaks that threaten a sharp pullback.
Regulators have already tightened their coverage of bank lending standards for property investment and could adopt stricter controls, such as higher capital requirements.
So far, the RBA has expressed confidence that tighter regulation will eventually cool the housing market, which is one reason many analysts believe it will still cut interest rates at its May policy meeting next week.
The central bank has been on hold since trimming rates to a record low of 2.25 per cent in February.
"Since the February rate cut the Sydney and, to a lesser extent, Melbourne housing markets have caught a second wind which is reflected in the higher rate of capital gain as well as the very strong auction results and rapid rate of sale for properties sold via private treaty," said RP Data head of research Tim Lawless.