Australia home prices jump to record high in Sept-RPData
SYDNEY Oct 1 (Reuters) - An index of home prices for Australia's major cities jumped to a record high in September fuelled by strong demand in Sydney and Melbourne, evidence that low mortgage rates were working to revive the housing market.
Figures out on Tuesday from property consultant RP Data-Rismark showed overall dwelling prices rose 1.6 percent in September, from August, and were 5.5 percent higher than in September last year.
The latest gains saw its index of prices just pip the previous all-time peak set in October 2010. The median property value across all 8 major cities hit A$500,000 ($466,200).
RP Data's director of research, Tim Lawless, said the gains in September were led by Australia's two largest housing markets, Sydney and Melbourne, where prices climbed more than 2 percent for the month.
For the year to September, values in Sydney were up by 8 percent while Melbourne boasted an increase of 5.4 percent.
The strength will likely stoke talk that record low interest rates are feeding a "bubble" in home prices, though Lawless emphasised the froth was very much centred in Sydney and Melbourne.
"Most other capital city housing markets are in fact showing only a modest growth trend," he noted. Prices in Perth, Brisbane, Darwin, Hobart and Canberra all fell in September.
The Reserve Bank of Australia (RBA) has cut interest rates to a record low of 2.5 percent in part to promote a recovery in home building.
The central bank has called talk of a bubble alarmist, though it has also cautioned that would-be home buyers should not expect a return to double-digit price gains.
The RBA holds its monthly meeting on Tuesday and is expected to stand pat on policy for now.
"One of the most positive outcomes of the strong housing market conditions is the flow on effects for new housing construction," said Lawless. "An uplift in the new housing sector is exactly what policy makers are hoping to see from the low interest rate setting." (Reporting by Wayne Cole; Editing by Shri Navaratnam)