SYDNEY, Feb 1 (Reuters) - Home prices in Australia’s major cities rebounded in January, according to industry data, a sign lower mortgage rates are finally gaining some traction in the economy.
Figures from property consultant RP Data-Rismark showed dwelling prices climbed 1.2 percent in January, from December. The increase turned annual growth in prices positive, with a gain of 1.8 percent compared to January 2012.
Since bottoming out in May last year, prices have risen by 3.1 percent.
The gains in January were concentrated in the Brisbane, Sydney and Perth markets where values were up 2.0 percent, 1.8 percent and 1.7 percent respectively.
The Reserve Bank of Australia (RBA) cut interest rates to record-matching lows of 3 percent last year in part to help revive activity in the housing market, and particularly construction.
“The Reserve Bank will be watching the performance of the housing market closely, and the positive trend in housing values will dampen calls for further interest rate cuts,” said RP Data’s research director, Tim Lawless.
The central bank holds its February policy meeting next week and is generally thought unlikely to ease again so soon after cutting in December. Financial markets imply around a one-in-four chance of an easing to 2.75 percent.
Lawless noted that homes were also remaining on the market for a shorter time. The typical capital city house took 55 days to sell, compared to a high of 76 days in February last year.
“With stock levels remaining high, it is likely to remain a buyers’ market for some time, however I think we are now seeing some balance return to the negotiation table,” said Lawless.
“Buyers are losing some of their negotiation power and homes are selling faster.”
Sydney was again the most expensive Australian city with a median home price of A$576,500 ($599,000), followed by Melbourne at A$492,500. The median for all eight capital cities in Australia was A$480,000. (Reporting by Wayne Cole)