House Prices Continue to Rise

The official ABS measure showed house prices rose 5.2% in 2009Q4, to be 13.6% higher over the year. The RBA slashing the cash rate to just 3.0% in early 2009, down from a peak of 7.25%, substantial improved the affordability of housing. That triggered a nationwide jump in house prices.
House prices have increased for three consecutive quarters, turning a 5.5%yr contraction in March 2009 to a 13.6%yr rise in December 2009. The official Q4 price result was somewhat stronger than private sector measures and may reflect an upward bias due to compositional shifts in market activity, namely cooling activity first home buyer segments. Indeed, our preferred monthly measures suggest price growth moderated in late 2009.

Source Westpac Economic Research

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