AUS
NZ
UK
CA
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IND
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Summary
- Australian house prices reported their sharpest monthly rise since 2003 amid record low interest rates and government’s support.
- House prices soared 2 per cent across the major capital cities compared to the last month.
- Separate data released on Monday showed the new loan commitments for housing surged by record 10.5 per cent to A$28.8 billion in January 2021 (seasonally adjusted).
Australian house prices reported their sharpest monthly rise since 2003 amid record low interest rates and government’s support to the real estate sector. The increase was spread across all the capital cities and regional markets.
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The national home prices surged 2.1 per cent in February, from 0.9 per cent in January 2021. The values were up 9.4 per cent from February 2020, according to the data released on Monday by property consultant CoreLogic. The sharp recovery comes after a steep slowdown in the realty sector due to the coronavirus pandemic.
Commenting on the data, Tim Lawless, head of research, CoreLogic said that the rise is on account of record-low mortgage rates, improving economic conditions, government incentives and low advertised supply levels.
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How different cities performed
House prices soared 2 per cent across the major capital cities compared to the last month. The prices were higher by 2.6 per cent from the last year, the data showed. The rebound could be attributed to the ease in coronavirus lockdowns and more people seeking living space.
In February, the home prices in two of the largest Australian cities Sydney and Melbourne were up 2.5 per cent and 2.1 per cent, respectively. While prices in Brisbane and Perth were up 1.5 per cent, Hobart added 2.5 per cent.
However, experts are uncertain about the momentum sustaining itself. With incomes remaining muted and fiscal stimulus being wound up, the affordability could be an issue for the sector going forward.
Lending drives home prices
Separate data released on Monday showed the new loan commitments for housing surged by record 10.5 per cent to A$28.8 billion in January 2021 (seasonally adjusted), according to the Australian Bureau of Statistics (ABS).
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Meanwhile, the Reserve Bank of Australia (RBA) recently slashed the official interest rate to record low 0.1 per cent. The central bank also extended the bond buying programme to keep the costs low for borrowers.
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