Australia’s March home prices rise for first time in a year: CoreLogic

AUSTRALIAN home prices rose for the first time in almost a year in March, fuelling hopes the property market may have found a floor amid low listings, a tight rental market and increasing migration levels.

Figures from property consultant CoreLogic on Monday (Apr 3) showed prices nationally rose 0.6 per cent in March from February, when values slipped 0.1 per cent. That marked the first month-on-month rise since April last year, just before the Reserve Bank of Australia (RBA) embarked on its most aggressive tightening campaign in modern history.

Prices were still down 8 per cent from a year earlier.

The gains were led by an impressive 1.4 per cent rebound in Sydney which first registered a 0.3 per cent growth in February, while prices in Melbourne rose 0.6 per cent, the first monthly increase since peaking in February last year.

CoreLogic’s research director Tim Lawless said it was clear that other factors are supporting home prices, despite the drag from higher interest rates.

“With rental markets this tight, it’s likely we are seeing some spillover from renting into purchasing,” said Lawless.

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“Similarly, with net overseas migration at record levels and rising, there is a chance more permanent or long-term migrants who can afford to, will skip the rental phase and fast track a home purchase simply because they can’t find rental accommodation.”

Adding to better prospects to the housing market, there is a real chance the RBA will pause its tightening campaign on Tuesday leaving rates at 3.6 per cent, after lifting rates by a whopping 350 basis points to curb red-hot inflation.

However, Lawless from CoreLogic cautioned that calling a trough in the current housing downturn may be too early, given an array of headwinds over the coming months as the full impact of higher interest rates flows through, the economy slows and the labour market loosens. REUTERS