SYDNEY, July 1 (Reuters) - Australian home prices showed some signs of stabilisation in June with values in the biggest markets of Sydney and Melbourne inching up for the first time since 2017 as sentiment was boosted by mortgage rate cuts by banks.
Monday’s report from property consultant CoreLogic showed home prices nationally fell 0.2% in June from May, when they eased 0.4%. The pace of decline has gradually slowed since December when prices slid 1.1%.
Home values in Sydney inched up 0.1% last month, marking its first monthly rise since July 2017. In Melbourne, prices rose 0.2%, recording the first increase since November 2017.
The revival will be welcomed by Australian policymakers who are hoping a lift in home values would boost consumer sentiment and stimulate demand in the economy.
Home prices in Australia have been in a free fall since late-2017, eroding household wealth and weighing on consumer spending. That is a major reason the Reserve Bank of Australia (RBA) cut its benchmark cash rate to an all-time low of 1.25% last month and is seen likely to ease again at its policy meeting on Tuesday.
“Potentially we are seeing the first signs that the top end of Sydney and Melbourne’s housing markets are leading the recovery trend,” said CoreLogic’s head of research, Tim Lawless.
“Anecdotally, we are hearing positive news from real estate groups that numbers for open homes and inspections are up, and lenders are taking more enquiries from interested borrowers. Overall, it looks like the tide may have turned for the housing market.”
Separate data showed preliminary auction clearance rates in Sydney at 72% and 70.6% for Melbourne, a strong rebound from the low 50s-60s range seen in recent months.
On an annual basis though, prices are still down 8% nationally, nearly 10% in Sydney and over 9% in Melbourne.
CoreLogic’s Lawless said a rapid recovery in prices was unlikely as banks were stringent in approving loans while weaker economic conditions in most of regional Australia was “likely to keep price growth at bay.”
Reporting by Swati Pandey; Editing by Sam Holmes