House prices 'are rising steadily'

There has been a lot of doom and gloom surrounding Australia's property market in recent months, but the fact is that house prices are slowly but surely on the up.

According to the latest Australian Bureau of Statistics (ABS) Index of Established House Prices, the average value of a home increased by 0.3 per cent in the September quarter of 2012.

Geordan Murray – an economist at the Housing Industry Association (HIA) – said this was the fifth consecutive quarter when the sector has remained "more or less steady".

Although current property prices are still 4.1 per cent down on the peaks seen in mid-2010, there are certainly plenty of reasons for Aussies to be optimistic.

"Lower [housing] interest rates, a relatively stable labour market, steadily rising household incomes and population growth continue to provide a stabilising influence on housing prices," Mr Murray remarked.

"The economic reality must certainly be a blow to the headline-chasing doomsayers who can't help but forecast an imminent collapse in Australian house prices."

RP Data recently suggested that dwelling values in all major capital cities except for Darwin and Perth fell in October, which will put a slight dampener on things – especially after such steady progress in the September quarter.

The housing situation in Perth is particularly interesting, as the demand for homes in the mining region has skyrocketed in recent years.

ABS figures showed that property prices had gone up by 1.8 per cent between July and September, putting it way ahead of other cities across Australia.

Mr Murray added that Perth's population growth has been in excess of three per cent and this will inevitably lead to a shortage of homes, which will in turn result in unbelievably high prices.

"The large move in the established price index for Perth should be ringing some alarm bells for the state's policy makers," he added.

Mortgage customers will also have been disappointed by the Reserve Bank of Australia's decision not to lower the national cash rate this week, as the organisation felt the current 3.25 per cent rate was sufficient for the time being.

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