House Prices in Australia on the Rise, Shows Signs of Recovery

House prices in Australia rose to a three-year high in the June quarter, climbing by 2.8 per cent. Compared with 2012's data for the month of June, current house prices rose 5.4 per cent in one year. According to the quarterly report of the Australian Property Monitors (APM), this level of growth has not been seen since March 2010.

Economists said Australian house prices will keep on rising even without a stimulus package from the government. The national average house prices have increased by 2.8 per cent. This was the third consecutive quarter that house prices in Australia rose.

Unlike the house prices in 2009 and 2010, the first home owner boost of the government has not affected buyer activity.

APM senior economist Andrew Wilson said the boom in the housing market share seen in 2012 is slowly declining. Unlike in 2009 and 2010, local drivers boost the growth of prices and buyer activity.

Mr. Wilson said buyer activity is expected to accelerate for the rest of 2013 due to rising prices and market momentum. Mr. Wilson said that with Australia's interest rates in years, increasing consumer confidence and generally stable economic conditions, buyer activity had improved during the first half of 2013.

The quarterly report also said that it Canberra, Perth and Sydney had recorded the highest median house prices ever for the June quarter. House prices in Melbourne had the strongest growth with prices rising at 5 per cent to 6.1 per cent. Unit prices increased in Sydney with 4.9 per cent and 9.3 per cent in Perth.

The Australian Bureau of Statistics also reported that things are looking up for the nation's residential real estate market with rising house prices in eight capital cities like Melbourne, Sydney, Canberra and Perth.

Real estate experts attribute the improvement in house prices to lower interest rates courtesy of the Reserve Bank of Australia and better affordability. Despite the signs of recovery, Australia has one of the least affordable housing markets when compared with the rest of the world.