Sydney - Melbourne Property Prices Rise - 1 Jul 09

Out today, the monthly RP Data-Rismark International, national Home Value Index confirmed that home values in Australia continued to trend upwards.Australian prices increased by 3.9% in the first 5 months of 2009. In Sydney average values were up 5.2%. Melbourne enjoyed the largest rebound, with average prices up 6.1%.

In terms of property types, units continue to outperform houses. Over the first five months of 2009 unit values increased by 4.5% while house values rose by 3.7%.

RP Data head of research Tim Lawless said, “These latest results herald a national residential market recovery.”

Rismark's managing director Christopher Joye said the recovery has proved key to economic confidence so far this year.

Craig James, chief economist at CommSec, said Australia could rightly claim the title of 'wonder from Down Under' as prices continue to rise.

"It is a simple case of supply and demand," he said. "Demand for homes is being spurred by improved affordability, the fastest population growth in 40 years and weak returns on other assets." The climb in prices should boost activity in the market, Mr James told ninemsn, helping to push prices between 5 and 8 % higher from now until the end of the year.

Alex Joiner, an economist at ANZ, also expects to see "modest growth" in property prices this year.

"These results put beyond doubt the fact that the local property market is not headed for the Armageddon scenario foreshadowed by some and that we will not see house prices fall to the precipitous extent that has been seen in many other advanced economies,"

Dr Joiner added "The recovery in Australia’s housing market, which has defied countless doomsayers, has in turn been the cornerstone of the Australian economy's stability in 2009," he said.

At the same time, the supply of new housing is stalling.

Mr Lawless stated that Investors are becoming increasingly attracted to the strong rental yields that are creating positive cash flow opportunities within key markets around Australia.”


The RBA, which subscribes to the RP Data-Rismark Index data, confirmed its findings in their June Board Minutes,

The Australian Bureau of Statistics housing finance data in April also showed the first signs of a rebound in investor participation.

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Chinese GDP Growth to Spur on Australian Economy - 16 July 09

A surprise surge in China's economic growth will boost the Australian economy as demand for local commodities rises. China's economy expanded by 7.9 percent over the second quarter of 2009, its government said today, outstripping economists forecasts of 7.5 percent.

Economists said the surprise uplift was good news for the Australian economy, which has so far survived a technical recession on the back of Chinese demand for resources.

China's industrial output rose by 9.1 per cent in the second quarter from a year earlier, according to official figures published today.

Savanth Sebastian, an economist at CommSec, said China's economy is on track for a sharp rebound which, going forward, puts Australian commodities in a "very popular light".


"Industrial production has picked up significantly, which means their insatiable appetite for Australian resources will continue," he told ninemsn.

Australia provides the most cost effective answer to China's resources demand, Mr Sebastian said, thanks to the high quality iron ore and our close geographical proximity.

Katie Dean, senior economist at ANZ, told ninemsn a recovery in China’s economy would continue to support the home economy. Ms Dean said China's recovery is good news for Australia as it will spur on commodity demand leading to a rise in the Aussie dollar.

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