House prices rise in Q2, ABS figures show

House prices across Australia rose in the second quarter of the year, much to the surprise of many economists.

Figures released by the Australian Bureau of Statistics (ABS) showed that property values increased by 0.5 per cent, which was a far better performance than a lot of experts had been predicting.

Most industry specialists thought that prices would decline by 0.7 per cent during the three-month period.

It seems that recent interest rate cuts have had a positive impact on the housing market and Aussies are now more willing to take on a mortgage.

The Reserve Bank of Australia has slashed the national cash rate by a total of 125 points since the start of November 2011 and it now stands at just 3.5 per cent.

JP Morgan economist Ben Jarman told the Australian Associated Press that the lower rates will support the property sector in the second half of 2012.

"We don't think that is going to cause the housing market to catch fire, but it is cushioning and insulating from the downside for sure," he remarked.

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