Australia home prices accelerate in August

A newly-constructed home is listed as sold on an advertising board in the Sydney suburb of Greenhills Beach.
A newly-constructed home is listed as sold on an advertising board in the Sydney suburb of Greenhills Beach.PHOTO: REUTERS

SYDNEY (REUTERS) - Australian home price growth accelerated in August as record-low mortgage rates spurred demand in the hot spots of Sydney and Melbourne, though the performance of markets elsewhere was much more patchy.

Figures on Thursday (Sept 1) from property consultant CoreLogic showed its index of home prices for the combined capital cities climbed 1.1 per cent in August, from July when it increased by 0.8 per cent.

Annual growth in prices picked up to 7 per cent in August, from 6.1 per cent in July, though that remains a long way from last year's peak above 11 per cent.

The spurt in prices follows rate cuts from the Reserve Bank of Australia (RBA) in May and early 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 specifically noted that changes to the methodology of CoreLogic's data had overstated recent price gains.

CoreLogic's August data continued that pattern with hefty rises reported in Sydney and Melbourne but huge variations elsewhere.

Home values were estimated to have jumped 1.4 per cent in Sydney for the month, lifting annual growth to 9.4 per cent. Melbourne saw gains of 1.5 per cent and 9.1 per cent respectively.

Brisbane saw monthly growth of just 0.4 per cent and Perth gained 0.2 per cent, while prices fell in Adelaide and Hobart.