The growth in the market is being by gains in the capital cities of states at the centre of the country’s mining boom.
Prices increased by 1.8% in Perth, 0.4% in Brisbane and by 0.3% in Sydney. They fell by 1.1% in Canberra and dropped 0.6% in Adelaide.
Prices climbed 0.3% in the September quarter from a year ago, the figures also show. On an annual basis Darwin saw the biggest clime with prices up 8.2%, followed by Perth up 4.4%. Melbourne saw the biggest drop, at 2.3%.
‘Lower than average interest rates are providing some support to demand in the economy. There is also some sign that they have led to a slight improvement in the property market,’ said RBA deputy governor Philip Lowe.
The latest figures from RP Data show that detached house prices fell 1% in October, following four months of gains, and apartment prices were down 0.6%.
Figures from the Australian Bureau of Statistics show that the weighted average of prices in eight major cities increased by 0.3% in the third quarter of 2012 compared with the second quarter when it increased by 0.6%.
However, new research from the Bank of America Merill Lynch Australia offers a different view of the housing market. The market analyst suggests that despite interest rate cuts over the past 12 months, house prices have remained at their weakest compared to the last 10 years.
Merill Lynch economists estimate that median house prices are still 1.2% lower than October last year, despite the cash rate being reduced by 1.5% and the standard variable rate reduced by about 1.15%. By comparison, house prices rose 37% after the RBA cut rates in 2001. Merill Lynch says the muted response is likely to continue as we approach the tail end of the mining investment boom.
Meanwhile a survey from UBS shows that Australian banks are tightening their lending standards. Over the last six months banks have tightened underwriting standards in mortgages. Chief executives of four big banks and other regional lenders said lending standards had tightened due to the current economic climate and concerns over the outlook for the housing market.
