SYDNEY • Australian home prices rose overall in September as record low mortgage rates kept demand strong in Melbourne and Sydney, although the performance of other cities was more patchy.
Figures from property consultant CoreLogic yesterday showed that its index of home prices for the combined capital cities climbed 1.0 per cent last month after rising 1.1 per cent in August.
Annual growth in prices ticked up to 7.1 per cent in September, from 7 per cent in August, though that remained a long way from last year's 11 per cent.
The second straight month of gains followed rate cuts from the Reserve Bank of Australia in May and August, which took bank borrowing costs to an all-time low of 1.5 per cent.
After its last easing, the central bank played down risks of a bubble in the housing market and noted that changes to the methodology of CoreLogic's data had overstated recent price gains.
The central bank holds its October policy meeting today and is considered almost certain to keep rates steady as it assesses the impact of past easing, Reuters reported.
CoreLogic's September data showed a familiar pattern with continued strength in Sydney and Melbourne but large variations elsewhere.
Home values were estimated to have jumped 2.3 per cent in Melbourne during September alone, bringing gains for the third quarter to a blistering 5 per cent.
Prices in Sydney increased by 0.8 per cent in September, and 3.5 per cent for the quarter. Canberra and Adelaide both had upbeat quarters, but prices fell in Brisbane, Perth and Darwin.
Foreign investment in Australian property has soared in recent years. This has fuelled public concerns that foreign buyers are squeezing out local buyers and making housing unaffordable.
Government data shows that Chinese investment in Australian residential and commercial property doubled to A$24 billion (S$25 billion) in 2015. China was the biggest source of property investment, followed by the US, Singapore and Malaysia.