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House prices still high, but easing: data

Reported by AAP
Tuesday, November 1, 2011
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House prices slackened off in the last quarter but still gave 110 per cent over the decade.

Figures from the Australian Bureau of Statistics (ABS) on Tuesday showed the average price of an established house in Australia's capital cities fell by 1.2 per cent in the September quarter, and by 2.2 per cent over the past year.

Prices remain relatively high, though, having still risen by 110 per cent over the 10 years to September.

That beat the 34 per cent rise in the consumer price index (CPI) by a wide margin, leaving housing prices in real terms - measured against the CPI - up by 57 per cent over that time.

But the recent trend is down.

Prices are down by an average of 3.3 per cent from their peak last year.

The latest quarterly numbers from the ABS confirm monthly figures from RP Data on Monday.

The RP Data numbers showed a marginal fall of 0.2 per cent in prices of all dwellings between August and September, and a drop from the peak in late 2010 of 3.6 per cent on average across the state and territory capitals.

Another indicator of a weak housing market came earlier on Tuesday, ahead of the ABS price data, in the form of new home sales estimates from the Housing Industry Association (HIA).

The number of new homes sold by large building firms fell in September to the lowest level since 2000.

And the 3.5 per cent seasonally adjusted fall was apparently no flash in the pan - the average for the past three months is 16.5 per cent lower than during the high plateau in sales over the March-May trimester.

The background is a relatively low level of lending indicated by earlier ABS data.

The August value of loans approved, aside from refinancing deals, was still six per cent lower than the average of the preceding five years, even before allowing for inflation.

The Reserve Bank of Australia (RBA), whose board holds its monthly monetary policy meeting on Tuesday, is well aware of the soft housing market.

So these figures, although they support arguments in favour of a cut in interest rates, would not have changed the odds of a cut measurably.

The RBA is due to announce its decision at 1430 AEDT.

26/10/2014 12:04Sydney, Australia. 26 October,2014
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