House prices rise in June, figures show

The average value of a capital city home in Australia increased by one per cent in June, new figures have suggested.

According to RP Data, this was the largest monthly jump in more than two years and reduced home loan interest rates have been cited as the main reason in the rising uptake of mortgages.

The Reserve Bank of Australia trimmed the national cash rate by a total of 75 points in May and June and this seems to have encouraged more people to get a foot on to the property ladder.

Although few lenders passed the cuts on to customers in their entirety, it appears that many house hunters were relieved to see the national rate fall to just 3.5 per cent.

"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," commented research director at RP Data Tim Lawless.

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