- Stay tuned for ABS second quarter house prices at 11.30am
Home prices recorded their second consecutive monthly rise in July as the effect of recent interest rate cuts filtered into the market, but prices rose more slowly than a month earlier.
RP Data-Rismark's capital city home price index rose 0.6 per cent in July following a 1 per cent rise in June which ended months of flat to lower prices.
Prices rose 1.2 per cent in Sydney and 1.4 per cent in Melbourne, while they slumped 2.5 per cent in Adelaide. In Perth they declined 0.5 per cent, while in Brisbane they slipped 0.4 per cent.
The RBA has cut the interest rate four times for a total of 125 basis points since November, although the commercial banks have passed along only 100 basis points in reductions to borrowers. Uncertainty about mortgage repayment costs and worries about the outlook for the global economy have slowed activity in the property market in the past year.
In recent weeks, auction clearances have hovered around 60 per cent in Sydney and Melbourne, well below the 80 per cent seen at the peak of the market in 2010.
Yet other measures of future demand for housing suggest the rate cuts are beginning to have some traction.
June building approvals rose 10.2 per cent in the year to June, defying economists' expectations of a 5.5 per cent drop. New home sales rose 2.8 per cent in June, according to the Housing Industry Association's new home sales report, marking its third consecutive month of growth.
Nonetheless, stories have emerged of auctions in Melbourne scrapped at the last minute because of lack of interest.
While analysts say the outlook for Sydney was more stable than Melbourne, the pervasive lack of affordability remains an obstacle there.
The Australian Bureau of Statistics will today release its second quarter capital city house price index, with the market forecasting a 0.5 per cent fall in the quarter, after a 1.1 per cent slump in the first quarter.