Australia home prices cool in August
Growth in Sydney prices have stalled and those in Melbourne have been up marginally, year on year
Home prices in Australia’s major cities rose only marginally in August as Sydney’s blistering run stalled, a tentative sign of cooling that would be a relief to regulators seeking to head off a debt-driven bubble.
Property consultant CoreLogic said its index of home prices for the combined capital cities rose just 0.1 per cent in August from July, when it surged 1.5 per cent. The index had also been updated using a new hedonic index methodology, CoreLogic said.
Annual growth in prices slowed to 9.7 per cent, from 10.5 per cent in July.
Prices in Sydney were dead flat for August, after jumping 1.4 per cent the month before, although annual growth remained strong at 13 per cent. Melbourne saw gains of 0.5 per cent in August and 12.7 per cent for the year.
A slowdown is much desired by the country’s main bank watchdog which has tightened standards on investment and interest-only loans, leading banks to raise rates on some mortgage products.
The Reserve Bank of Australia (RBA) has also been concerned that debt-fuelled speculation in property could ultimately hurt both consumers and banks.
