House prices retreat 1.2 per cent in Q3

Aussies may be more inclined to take out home loans in light of recent figures indicating a decline in the cost of property during the third quarter of 2011.

The Australian Bureau of Statistics' Established House Price Index showed that year-on-year, prices fell by 2.2 per cent.

They also declined by 1.2 per cent compared to the preceding quarter, which was less than the 1.5 per cent forecasted by analysts.

Matthew Hassan, senior economist at Westpac, said the Reserve Bank of Australia's decision to reduce the cash rate to 4.5 per cent may start to restore demand for property in the country.

However, he said it is unlikely to spark a significant short-term resurgence in the market.

"The ABS measure continues to show a 'soft landing' for housing with modest price slippage since Q3 2010 extending now into the second half of 2011," he commented.

Kristy Sheppard, spokesperson for Mortgage Choice, recently said Aussies should look at the variety of ways they can expand their property portfolios, for example by taking out interest only home loans or using their current home's equity.

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