SYDNEY, May 1 (Reuters) – Australia’s home prices rose at the slowest pace in over a year in April as higher borrowing costs and war in the Middle East pushed prices in Sydney and Melbourne into outright declines, data from Cotality showed on Friday.
The Reserve Bank of Australia has raised interest rates twice this year – in February and March – to touch 4.1% to tame inflation, reversing two of the three rate cuts made last year. The conflict in the Middle East has driven energy costs sharply higher, hit consumer and business sentiment, and darkened the economic outlook.
KEY DETAILS
• National home prices rose 0.3% in April to a record median value of A$940,048 ($668,844), figures from Cotality showed. That was the slowest pace of growth since January last year just before the start of the RBA’s rate-cutting cycle that fuelled house prices.
• House prices in Sydney and Melbourne both fell 0.6% in the month as more stock came to the market. Advertised listings in Sydney stood at 9.4% above the five-year average while in Melbourne they were 2.2% above average.
• Other capital cities recorded a slower but still solid pace of growth. Prices in Perth rose 2.1%, while Brisbane and Adelaide gained 1.1% and 1.2% respectively, driven by still-low inventory levels.
• Growth is more concentrated in lower-priced segments of the market thanks to demand from first-home buyers.
• “The housing market was losing momentum from late last year as affordability and serviceability constraints weighed on demand,” said Tim Lawless, Cotality’s research director. “Now we have the additional downside pressure of higher interest rates, sentiment has fallen off a cliff, and rising inflation is set to drive the cost of debt even higher.”
($1 = 1.4055 Australian dollars)
(Reporting by Stella Qiu; Editing by Tom Hogue)
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