Ted's Real Estate

House prices up 0.4% in July

RP Data predicts little growth for the remainder of 2010

Australian house prices grew by a seasonally adjusted 0.4% during July, following on from a 1% fall in June, according to the latest RP Data-Rismark figures.

The research found that in the July quarter, national city dwelling values were down 0.8% with a median dwelling price of $465,000. However, prices over the year were up by 9.7%.

Darwin performed the strongest in the three months to July, with values up 1.1%, while Brisbane and Perth both recorded a 2.5% fall.

Sydney values rose by 0.3% during the quarter, with Melbourne values falling by 1.1%. Adelaide prices rose by 0.2% and Hobart prices also fell by 2.4%.

RP Data research director Tim Lawless said in a statement the result shows the housing market is recording a soft landing, following a boom over the past 18 months.

"In the period between end 2008 and March 2010, Australian home values rose by 16.3%. Yet monthly growth rates have declined consistently since the start of the year," he said.

"RP Data and Rismark expect to see the market track sideways over the second half of the year. There is the possibility of modest gains if mortgage rates remain in check and economic conditions improve."

Rismark International managing director Christopher Joye also said in a statement the figures dispel the myth that housing prices would begin to fall.

"Australia's housing market appears to have gravitated back to a no-to-very low growth trajectory, as we forecast."

"Looking forward, I would expect to see the major banks pushing housing credit growth a little harder as profitability gains – driven by reduced impairment provisions across their business lending books – dissipate."

This comment comes as a number of banking institutions, including Westpac, BankWest and non-bank lender Yellow Brick Road, have introduced a number of measures in order to attract first home buyers.

"Australian housing credit growth has been running at record low levels, and has experienced a downward trend since 2006. An increase in credit growth back to reasonable single-digit rates will provide further support to the market in the next 12 months."

Source Patrick Stafford Smart Company