House prices take off

House prices are rising again, in all Australian capitals.

And there is now virtually no hope of further cuts in Australia’s interest rates.

The Reserve Bank board made that plain, once again, yesterday when it held its marker interest rate at 3 per cent.

These facts are not unrelated.

The bank’s Governor, Glenn Stevens, has already let it be known that he doesn’t want to see another house price boom.

So figures the Australian Bureau of Statistics has just released would have disturbed him.

They showed, for example,  that the average price of an established home in Sydney leapt by 4.9 per cent, in the three months to the end of June.

The rise in Melbourne, over the same time, was even bigger at 5.2 per cent.

These rises, in Australia’s two biggest cities, made a strong average rise, for all State capitals, inevitable.

It came in at 4.2 per cent.

House prices in Adelaide rose by 3.4 per cent over the same time, while those in Brisbane rose 2.5 per cent.

Perth prices rose by 2.7 per cent, Hobart’s by 2.5 per cent and Canberra’s by 3.6 per cent.

The weighted average price for an established home in an Australian capital at the end of June this year was still 1.4 per cent below that seen 12 months earlier.

But the rises, in the June quarter itself, show that house prices can still rise very rapidly in Australia.

Other figures released by the Bureau though showed that the early stages of the Federal government’s stimulus packages are now losing their punch.

Retail trade, throughout Australia, fell by 1.4 per cent in the March quarter.

The bureau is also planning to release a new set of labour force figures tomorrow. (Thursday)

These will be watched anxiously.  The government still expects Australia’s unemployment rate to rise substantially in the months ahead