House prices across the nation are beginning to recover, according to RP Data, who recorded an average house price growth of one per cent over the month to June.
The daily RP Data-Rismark Home Value Index recorded a price increase across most of the capital cities, which has partially reversed the 1.4 per cent fall recorded in May.
RP Data research director Tim Lawless said the Reserve Bank’s decision to slash the cash rate was behind the price increase.
“The catalyst for the improvement in market conditions is likely to have been the 55 basis point reduction in the average discounted home loan rate over May and June,” he said. “As well as the subtle improvement in consumer sentiment readings that have been reported.”
In what is typically a seasonally weak month, dwelling values rose in Sydney, Melbourne and Brisbane by one per cent.
Perth and Canberra both recorded a price increase of two per cent, and Hobart saw the largest rise, at 2.7 per cent.
And while there were signs of weakness in Darwin which dropped by 0.7 per cent, and Adelaide which was down by 1.1 per cent, the RP Data-Rismark claims toward the end of the month, both cities prices began to pick up toward the end of the month.
According to Mr Lawless, the healthy capital gain in June comes as no surprise.
“The RP Data-Rismark daily index across the eight major capitals has been consistently rising over the month, foreshadowing this positive month-on-month result.
“The increase in capital city dwelling values is an encouraging sign that the market appears to be responding to improved housing affordability and lower interest rates.”
However, Louis Christopher, Managing Director of SQM Research has claimed that the results are flawed and are not an indication of the property market they are seeing.
“I do not believe for a moment that house prices are now rising in Sydney or Melbourne as RP Data/Rismark has claimed today.
“Their daily hedonic index, for which these claims are based on, is an unreliable index as it is based on a miniscule proportion of actual sales that happen on a daily basis. Effectively on a day to day basis, the index misses out on over 95 per cent of sales.
““There is no other measurement out there that is indicating that prices are rising,” Mr Christopher concluded.