Any person organizing a property investment in Australia major cities could be buoyed by reports that all eight capital cities showed modest easing in house prices.
The news was tenderly welcomed by Harley Dale, chief economist at the Housing Industry Association (HIA), who asserted that this could be a start toward “an improved environment for 2012″ when it comes down to property.
New figures from the Australian Bureau of Stats (ABS) show that established house prices dropped by an average of one percent in the final quarter of 2011 – resulting in a figure 4.8 per cent below that recorded in the same period the previous year.
Dr Dale noted: “The ABS existing house price series unearths yearly declines in established house prices for all 8 capital towns, and quarterly declines with the exceptions of Perth, Hobart, and Canberra.”
Price will be boosted even further with the announcement of a further rate cut when the Reserve Bank of Australia’s financial policy committee meets the week after next (Feb 7) to make a decision on the money rate.
Consecutive cuts of 25 basis points each in November and December were applauded by property groups across Australia – though many have pronounced that more must be done in the new year.
Last week, HIA senior economist Andrew Harvey asserted “there shouldn't be any question as to a rate cut in Feb” – adding that this also needs to be passed on by Australia’s major banks to pass on any reductions in total.
Harvey added the financial policy committee is likely to identify that a rate cut is “the only prudent plan of action” given global uncertainty, particularly concerning the EU economy.
A flat strapline inflation result for the consumer price index in the December quarter means that there is enough space to make a reduction to the official money rates, related Harvey, concluding that this is going to be accompanied by govt. impulse measures to support the Australian property market.