Another statistic high on the discussion list at the RBA meeting today will be the sharp slowing in the growth in Australian home prices.
Private surveys have already pointed to the slowdown and yesterday the Australian Bureau of Statistics revealed that house price growth slowed to a crawl in the September quarter.
The news confirms that the RBA’s six rate rises (and a bit more from the banks on top) is curbing the excessive growth we saw at the start of the year and in late 2009, just as they are also curbing growth in private consumption.
The weighted average of eight capital cities rose just 0.1% in the third quarter, following a 3.1% increase in the second quarter and 4.8% in the March quarter.
It was the weakest rise since the March quarter of last year.
According to the ABS figures, the growth in home prices over the year to September slowed from 11.5% from the higher 18.4% in the year to June and massive 24% acceleration in the year to March.
Analysts expected no change to the quarterly prices and annual rise of 13.4%.
The ABS survey, which is compiled in the eight major cities of the country, compares to the reading in last week’s September report from RPData/Rismark .
"Over the September quarter, Australian capital city home values declined by 0.4 per cent seasonally-adjusted (0.0 per cent raw). Over the 12 months to September, Australian capital city home values have risen by 8 per cent."
It said that in the month of September, "Capital city home values were mostly unchanged (+0.1 per cent seasonally adjusted / +0.4 per cent unadjusted) and have not risen since May.
"The weaker ‘Rest of State’ markets fell -0.9 per cent (seasonally adjusted) and -1.5 per cent (unadjusted) in September and have not increased since Dec’ 2009"
"Over the September quarter the RP Data-Rismark Rest of State Index has recorded a 1.5 per cent seasonally adjusted fall in house values (-2.4 per cent unadjusted).
"Houses in the Rest of State markets have realised no capital growth at all in 2010, and just 2.7 per cent in the 12 months to end September."
Melbourne remained strong with house prices rising 2.7% in the quarter in Melbourne. That’s down sharply from the start of the year.
For the year, they jumped 18.8%, down from a hot 24% or more in the year to June.
House prices in Sydney rose 11% in the year to September, half the 21.4% annual rates in the year to June.
But they fell 0.9% in the September quarter.
The ABS said that besides Melbourne, preliminary estimates show that capital city indexes also rose in Perth (+0.4%) and Darwin (+0.3%).
As well as Sydney, prices also fell in Brisbane (-2.1%), Adelaide (-1.4%), Hobart (-1.4%) and Canberra (-0.4%).
Besides the annual rise in Melbourne and Sydney, the price index rose 11% in Canberra, 9.8% in Darwin, 6.3% in Adelaide, 4.2% in Hobart and just 3% in Brisbane.
