The buoyant property market in Australia is set to cool as the Australian central bank take charge over its inflation worries. The Australian interests rates rose four times in 2010 to 4.75% which has slowed house price increases.
Despite the hikes in interest rates Sydney and Melbourne house prices posted bigger gains, rising 6.6 per cent and 8.4 per cent respectively.
Perth was the worst performing state according to new figures from RP Data-Rismark. It reveals that the median dwelling price in the city fell 1.9 per cent in the final three months of 2010, and 2.3 per cent for the year. The median price stood at $465,000 at the end of the year, 0.9 per cent lower than November.
The Australian Bureau of Statistics reports that he Australian house price index only climbed up by 0.7 per cent in the December quarter indicating that the banks tactics are working.
Macquarie economist Ben Dinte ââ¬ÅWe expect house prices will continue to be constrained in the coming year because of the tightening bias exhibited by the RBA,ââ¬Â he said. That ââ¬Åtightening biasââ¬Â – or the desire by the central bank to lift rates to hold back inflation pressure – is now weighing on house prices, said Mr Dinte.
Unofficial increases from commercial banks added yet more cost to monthly mortgage repayments, slowing buyersââ¬â¢ interest in homes.
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