The housing finance data released last week by the ABS put a bit of a halt on the housing price bubble story, and also a halt on any changes to interests rates in the short term.
After a few weeks of seemingly incessant noise about the booming housing market, the August figures showed the growth in housing loans eased for the fifth month in a row, with the value of loans in August growing by only 0.5%, down from 1.8% in March.
So while the housing market continues to improve, the heat does seem to have come out of it somewhat. It could be that the September election influenced sales, however it looks more like just a continuation of a trend.
Certainly housing prices have increased. As the RBA noted in the minutes of its latest board meeting, house prices increased by around 2.5% over the September quarter and by 5.5% over the year. But we need a bit of perspective. As I’ve noted a few times, the “boom” in prices is not in the same league as occurred in the early 2000s after the RBA cut interest rates by two percentage points after January 2001.
via The Guardian
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