Australian Home Prices Flat in Welcome News for RBA

Home prices in Australia’s capitals rose only marginally in September, slowing after three straight months of strong gains, with five of eight cities recording falls in the month.  The slowdown should actually be welcomed by the Reserve Bank of Australia (RBA)which recently has become concerned that a surge in borrowing to buy investment properties could lift prices to unsustainable levels.

The central bank is even considering whether banks should face tougher lending standards on some types of mortgages in an attempt to restrain investors.  Top RBA officials are due to appear before lawmakers on Thursday to answer questions on what measures might be proposed, and how to ensure they do not harm housing affordability or the supply of new homes.

Figures from property consultant RPData-Rismark showed dwelling prices in Australia’s major cities rose just 0.1 percent in September, from August when they climbed 1.1 percent.  Prices were up 9.3 percent on September last year, again pulling back from August’s 10.9 percent pace.

Reuters

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