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Australian home prices climb 1% in Oct: RPData
[SYDNEY] Home prices across Australia's capital cities picked up pace in October led by strong demand in Sydney and Melbourne, a red flag to authorities who are considering tightening lending standards to take some froth out of the market.
Figures from property consultant RPData CoreLogic showed dwelling prices over all of Australia's major cities climbed 1 per cent in October, from September when they had inched up only 0.1 per cent. For the three months to October, prices climbed 2.2 per cent.
The pick up would likely not be welcomed by the Reserve Bank of Australia (RBA) which has become concerned that a surge in borrowing to buy investment properties could lift prices to unsustainable levels.
Regulators are considering whether banks should face tougher lending standards on some types of mortgages in an attempt to restrain investors, with steps likely to be announced before year end.
Yet the annual pace of home price growth did slow again in October to stand at 8.9 per cent, down from 9.3 per cent in September and a steamy 10.9 per cent in August.
And all the gains in October came in just three cities, with prices falling in five others. "Looking at the increase in home values over the 12 months to October, it is clear that the rate of capital growth is continuing to moderate," said RP Data research director Tim Lawless.
Sydney again led the way with annual price growth of 13.1 per cent in October, though that compared with more than 16 per cent a couple of months previously.
Still, the housing market remained strong overall with auction clearance rates above 70 per cent and turnover high.
The median price of a home in Sydney was A$680,000 (US$595,000), compared to A$555,000 in Melbourne and A$545,000 across all the major cities.
Rising home prices had been initially tolerated by policymakers as necessary to encourage a much-needed revival in home building, which is indeed underway.