Property prices rose in the June quarter despite buyers receiving conflicting signals about the outlook for the property market.
House prices rose 0.5 per cent in the June quarter, following a 1.1 per cent slump in the first quarter, the Australian Bureau of Statistics said. Economists polled by Bloomberg tipped a 0.5 per cent fall.
Over the year to June, house prices fell 2.1 per cent, after a 4.5 per cent fall in the year to March, the ABS said. Analysts forecast a 4.2 per cent drop in that time.
Values on residential property have drifted lower through much of the year, as consumers show caution about borrowing for properties and the outlook for the economy remains unclear.
The Reserve Bank, responding to a broader slowdown in the domestic sector, has cut rates four times since November, helping to buoy prices in June and July, according to RP Data figures released today.
ANZ property economist David Cannington said the June quarter data was stronger than expected but it did not suggest a recovery in house prices.
“It’s still too early to call a turnaround in house prices because of the weak sentiment and weak sales activity in the market,” said Mr Cannington.
The property market continues to be dogged by poor confidence, said Mr Cannington, with the European debt crisis and uncertainty about the health of the global economy likely to continue to weigh on market sentiment in the near-term.
The 75 basis points in RBA rate cuts in May and June should help prices in the September quarter, said Mr Cannington.
‘‘But on their own I don’t think the rate cuts are enough to trigger a turnaround in house prices given the weakness of sentiment.’’
More to come.
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