National housing values up 1.63%: survey

The value of housing across Australia rose 1.63 per cent in the first quarter of
this year after a fall in borrowing rates lured buyers into the market, a survey
shows.
The RP Data-Rismark national dwelling value index rose to 457.191 points in the
three months ended March, from 454.618 points at the end of 2008.
First home buyers were particularly active in the quarter as they rushed to take
advantage of a boost to the Federal government's first home owners grant.
A fall in base lending rates to a 45-year low of 3.25 per cent in February, which in
turn helped lower bank mortgage rates to an average of 5.7 per cent, also
contributed.
The survey noted a 0.9 per cent spike the value of residential property in February
and a further 0.6 per cent gain in March.
"This gradual recovery in Australian house prices has been driven by the 40 per cent
fall in home loan rates to 5.7 per cent, which are now at their lowest levels since
July 1968," Rismark director Christopher Joye said on Thursday in a statement.
"The ratio of total household interest payments to disposable income has fallen
rapidly from 15 per cent to 10 per cent as a consequence."
In February, the Reserve Bank of Australia cut the cash interest rate to 3.25 per
cent, leaving room for the commercial banks to lower their variable mortgage lending
rates.
RP Data director of research Tim Lawless said the boost the first home owners grant
supported the housing market, but key driver was low interest rates. He noted that
first home buyer made up only 30 per cent of all property sales.
Most of the growth was driven by increases in Darwin, Sydney and Melbourne, where
property values rose by 2.75 per cent, 2.44 per cent and 2.42 per cent,
respectively.
But values in Perth fell by 0.71 per cent and were down 0.34 per cent in Adelaide.
The quarterly survey showed Sydney was one of the best performing capital cities,
with housing values up 2.39 per cent and unit values up 2.54 per cent.
"A return to modest growth has been a long time coming for Australia's largest
city," the survey said.
But housing values in Sydney are still $16,000 lower than in 2004, when the market
peaked.
Melbourne was close behind its eastern cousin with housing values up 2.29 per cent
and units up 2.83 per cent in the first quarter.
In Darwin, unit values soared by 6.38 per cent while housing gained 1.59 per cent.
But in Perth, housing values fell 0.72 per cent and units shed 0.7 per cent.