Figures from property consultant CoreLogic on Monday showed prices nationally rose 0.6% in March from February, when values slipped 0.1%. That marked the first month-on-month rise since April last year, just before the Reserve Bank of Australia embarked on its most aggressive tightening campaign in modern history.
Prices were still down 8% from a year earlier. The gains were led by an impressive 1.4% rebound in Sydney which first registered a 0.3% growth in February, while prices in Melbourne rose 0.6%, the first monthly increase since peaking in February last year.
CoreLogic's research director Tim Lawless said it was clear that other factors are supporting home prices, despite the drag from higher interest rates.
"With rental markets this tight, it's likely we are seeing some spillover from renting into purchasing," said Lawless.
"Similarly, with net overseas migration at record levels and rising, there is a chance more permanent or long-term migrants who can afford to, will skip the rental phase and fast track a home purchase simply because they can't find rental accommodation."
Adding to better prospects to the housing market, there is a
real chance the RBA will pause its tightening campaign on
Tuesday leaving rates at 3.6%, after lifting rates by a whopping
350 basis points to curb red-hot inflation. However, Lawless from CoreLogic cautioned that calling a
trough in the current housing downturn may be too early, given
an array of headwinds over the coming months as the full impact
of higher interest rates flows through, the economy slows and
the labour market loosens.
(Reporting by Stella Qiu; Editing by Lincoln Feast.)
