SYDNEY (Reuters) – Australian home prices rose for a fourth consecutive month in June as a sustained squeeze on housing supply helped lift values nationwide, data showed on Monday.
Property consultant CoreLogic figures showed national home prices were up 1.1% in June from the previous month, after bottoming in February and starting a sustained rise.
Australia’s households are among the most indebted in the world, while housing affordability has recently plumbed all-time lows.
The Reserve Bank of Australia is set to raise its key interest rate by 25 basis points to 4.35% on Tuesday to curb stubbornly high inflation, although a Reuters poll of economists suggested the decision would be a close call.
Every state and territory capital except Tasmania’s Hobart recorded higher prices for dwellings, according to CoreLogic. Sydney, Australia’s biggest city and capital of New South Wales, led the way with a 1.7% surge. Brisbane, the capital of Queensland, followed at 1.3%.
CoreLogic’s Tim Lawless said a lack of supply was still the main driver of price rises, adding that “the flow of new capital city listings was nearly 10% below the previous five-year average” in June.
While values continued to record “broad-based upswing”, the pace of growth in most capitals slowed, according to CoreLogic.
“A slowdown in the pace of capital gains could be a reflection of a change in sentiment as interest rate expectations revise higher,” Lawless said.
“Higher interest rates and lower sentiment will likely weigh on the number of active home buyers, helping to rebalance the disconnect between demand and supply.”
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