Australia home prices accelerate in August: CoreLogic

Workers renovate a house in the Sydney suburb of Cammeray, Australia

SYDNEY (Reuters) – Australian home price growth accelerated in August as record-low mortgage rates spurred demand in the hot spots of Sydney and Melbourne, though the performance of markets elsewhere was much more patchy.

Thursday’s figures from property consultant CoreLogic showed its index of home prices for the combined capital cities climbed 1.1 percent in August, from July when it increased by 0.8 percent.

Annual growth in prices picked up to 7 percent in August, from 6.1 percent in July, though that remains a long way from last year’s peak above 11 percent.

The spurt in prices follows rate cuts from the Reserve Bank of Australia (RBA) in May and early August, which took bank borrowing costs to an all-time low of 1.5 percent.

After its last easing, the central bank played down risks of a bubble in the housing market and specifically noted that changes to the methodology of CoreLogic’s data had overstated recent price gains.

CoreLogic’s August data continued that pattern with hefty rises reported in Sydney and Melbourne but huge variations elsewhere.

Home values were estimated to have jumped 1.4 percent in Sydney for the month, lifting annual growth to 9.4 percent.

Melbourne saw gains of 1.5 percent and 9.1 percent respectively.

Brisbane saw monthly growth of just 0.4 percent and Perth gained 0.2 percent, while prices fell in Adelaide and Hobart.

(Reporting by Wayne Cole; Editing by Eric Meijer)