According to RP Data-Rismark Home Value Index, increases are recorded in home values across both capital city and regional markets in the month of November following the RBA’s decision to cut interest rates by 0.25 percentage points.
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On the subject of property values Rismark’s director, Christopher Joye, commented, “For Australia’s capital city and regional markets, this was the single best monthly result since December 2010, and bodes well for housing activity during the first quarter of 2012, which we project will rebound solidly. The best proxy for housing demand—the number of new home loans approved for purchasing established properties—has risen robustly every month since its lowest point in March.”
“The November result is consistent with our forecasts that Australia’s housing market will respond much more quickly to the RBA’s November and December cuts than many analysts expect. Over 90 per cent of all Australian home loans are fully variable rate, and lenders have passed on most of the 0.50 percentage points worth of RBA rate cuts during the final two months of the year. Borrowers can now get fixed-rate loans for around 5.9 per cent and discounted variable rate loans as low as 6.14 per cent. As Australia’s most interest rate sensitive sector, the housing market will be one of the biggest beneficiaries of the RBA’s generosity alongside consumer spending. We expect to see house prices rising again in 2012.”
