APM's stratified median house price index reported quite reasonable house price growth of 0.9% in the March quarter 2012. Readers may recall that late last year I semi-controversially forecast a cessation of the losses and higher activity in Q1. I am happy to say that I expect even better housing conditions if the RBA cuts by 50bps over May and June. The third important index will be the ABS release, which comes next week. Here's the AFR today:
The median prices of houses rose in most capital cities in the first three months of 2012, stoking expectations that cuts to interest rates will fuel further gains.
The average house price advanced 0.9 per cent in the March quarter, after the Reserve Bank of Australia cut rates in November and December and on the prospect of more rare reductions this year.
Sydney remains the most expensive capital, with a median house price of $641,037, up 1.4 per cent in the quarter, according to Australian Property Monitors, which is owned by Fairfax Media. House prices rose 1.6 per cent in Melbourne, 1 per cent in Hobart, 0.9 per cent in Canberra and 0.1 per cent in Perth, APM said. They fell 0.3 per cent in Brisbane and Adelaide.
“It is the beginning of a recovery,” APM economist Andrew Wilson said. “We are getting increased buyer activity.’’ Confidence was likely to continue rising this year after a subdued 2011, he said.
Mr Wilson said the prospect of lower official interest rates would be good news for the housing markets, particularly those areas that are “still in parts recessed’’. Nationally, median unit prices rose 0.1 per cent in the March quarter, the first increase since June 2010, APM said.
