House prices have jumped within days of the Reserve Bank cutting interest rates, as Australia already looks to have exited one of its shortest and mildest property downturns on record.
CoreLogic’s widely watched Home Value Index (HVI) posted a 0.3 per cent national rise in February, ending a shallow three-month downturn where prices eased just 0.4 per cent.
CoreLogic’s Eliza Owen says, “Sydney, Melbourne and generally markets that had a stronger reaction to rate rises were going to see the biggest benefit from a rate reduction.”
But the Reserve Bank governor wasn’t too worried about sparking another house price boom on the day she cut rates.
Michele Bullock doesn’t think monetary policy is to blame. She said, “I don’t think 25 basis points (will) makes a huge difference.”
Ms Owen pointed to some positive news for Victorian buyers, saying “over the past five years, Melbourne home values are only up about 8% compared to a broader uplift of around 30% across the country.
The Productivity Commission chair Danielle Wood said Melbourne’s added about 30% more houses per person than in Sydney.
The Victorian government has also been unique in dramatically increasing property taxes, especially on investors and empty homes.
Outside Victoria, most of Australia remains a seller’s market.
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