Australian house prices growing
Wednesday, 13 February 2008
Home owners bracing themselves for a likely interest rate rise tomorrow can draw some comfort from new data showing house prices across Australia are growing at more than 12 per cent on average a year.
The Australian Bureau of Statistics´ (ABS) house price index - which calculates the average price of the eight capital cities - rose by 12.3 per cent in the year to December. This is the fastest annual pace since March 2004, the tail-end of the last Australia-wide housing boom. Other ABS data showed the country´s monthly international trade deficit narrowed.
In the December quarter the house price index rose by 3.2 per cent. Economists had expected the index to rise 3.0 in the quarter. "Strong annual growth in Australian house prices compared with the annual decline in US house prices provides another clear indicator why the Reserve Bank is hiking (rates) at a time when the US (Federal Reserve) is cutting rates aggressively," Lehman Brothers Australia chief economist Stephen Roberts said.
The Reserve Bank of Australia is widely tipped to lift its official cash rate to 7.0 per cent from 6.75 per cent at tomorrow´s monthly board meeting as it tries to rein-in ballooning inflation. Earlier, a private survey showed there was no let-up in building price pressures in January.
The Australian Bureau of Statistics´ (ABS) house price index - which calculates the average price of the eight capital cities - rose by 12.3 per cent in the year to December. This is the fastest annual pace since March 2004, the tail-end of the last Australia-wide housing boom. Other ABS data showed the country´s monthly international trade deficit narrowed.
In the December quarter the house price index rose by 3.2 per cent. Economists had expected the index to rise 3.0 in the quarter. "Strong annual growth in Australian house prices compared with the annual decline in US house prices provides another clear indicator why the Reserve Bank is hiking (rates) at a time when the US (Federal Reserve) is cutting rates aggressively," Lehman Brothers Australia chief economist Stephen Roberts said.
The Reserve Bank of Australia is widely tipped to lift its official cash rate to 7.0 per cent from 6.75 per cent at tomorrow´s monthly board meeting as it tries to rein-in ballooning inflation. Earlier, a private survey showed there was no let-up in building price pressures in January.