Home prices continue to rise

CommSec Economics yesterday reported that Australian home prices soared to record highs in August, underpinned by low interest rates, grants to first home owners and growing confidence about the job market.

This came after the release of RP Data-Rismark Hedonic Australian Home Value Index – the largest property database in Australia – which showed prices had lifted by 1.9 per cent in August. This was the eighth consecutive monthly gain. The August report for also showed that over the past year, Australian dwelling prices have risen by 6.6 per cent – the strongest gain in 15 months. Further more there the index showed that prices are 3.8 percnet higher than the previous peak set in February 2008. So all captial cities and dwellings are higher in price then a year ago.

The higher-priced suburbs are now showing stronger price gains than cheaper suburbs. Both top-end and medium-price home prices have risen 8.2 per cent since the start of the year with prices in cheaper suburbs up 7.5 per cent.

CommSec Ecconomics then went on further to explain they feel that demand for housing is out-stripping supply of homes and looks to continue this way even after interest rates start to rise.

Information drawn from CommSec Economic update.