Despite an increase in house prices over the March quarter, the Real Estate Institute of Australia (REIA) has warned the RBA not to lift rates when the board meets later today.
According to the Australian Bureau of Statistics’ House Price Index, house prices climbed 4.8 per cent throughout the March 2010 quarter.
But REIA president David Airey said the activity was due to “compositional” changes in the market, and should not influence the RBA’s decision to lift rates.
“What we are seeing is the impact of up-graders in the market as they purchase their second or third home,” Mr Airey said.
Mr Airey said that after experiencing four quarters of sustained falls last year, the Australian property market is now seeing a recovery. However, he was quick to point out that positive market activity is not the result of any uniform rate change.
“History tells us that houses prices don’t change at uniform rates,” he said.
“I hope the RBA recognises that the latest figures are more about compositional changes in the market, rather than a rampant marketing.”