04/08/2008 - 09:40

Perth house prices suffer biggest drop

04/08/2008 - 09:40

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Perth has suffered the biggest drop in house prices, falling 2.4 per cent in the June quarter, as capital city house prices across Australia decline by the sharpest rate in nearly than three years.

Perth has suffered the biggest drop in house prices, falling 2.4 per cent in the June quarter, as capital city house prices across Australia decline by the sharpest rate in nearly than three years.

The Australian Bureau of Statistics house price index - which calculates the average for the country's eight capitals - fell 0.3 per cent in the June quarter.

This left the annual rate at its slowest pace in two years at 8.2 per cent, compared with 13.2 per cent growth in year to March.

Economists had expected a fall of 1.0 per cent for the June quarter.

Perth experienced the largest fall of the capital cities, dropping 2.4 per cent, and house prices are now falling at an annual rate of 0.9 per cent.

Hobart reported a 2.0 per cent decline and Canberra 1.4 per cent fall.

Darwin saw the biggest increase with a rise of 1.9 per cent, while the country's largest housing market - Sydney - rose 0.3 per cent.

CommSec chief equities economist Craig James said house prices were "about right", given they rose by 8.2 per cent over the year to June, identical to the 20-year average of the index.

"Clearly house prices have slowed markedly over the past six months, but that is hardly a surprise in the wake of sharp rises in mortgage interest rates," Mr James said.

"But in contrast to the last slowdown in 2005, Australian house prices have been quite resilient."

The ABS report adds to a slew of other data showing the economy is slowing sharply, raising speculation the Reserve Bank of Australia will cut interest rates before the end of the year.

The RBA holds its monthly board meeting tomorrow, but economists expect it to keep its key cash rate unchanged for a fifth straight month.

Other private data also showed the country's job prospects are looking gloomy with businesses further winding back hiring intentions.

Job advertisements fell for a third successive month, according to the ANZ bank.

It says newspaper and internet job ads fell by a seasonally-adjusted 0.3 per cent in July.

ANZ co-head of economics Warren Hogan said jobs growth was likely to slow in coming months, and predicted the jobless rate would climb to 4.9 per cent by June 2009, up from 4.2 per cent in June 2008.

Official labour force data is released on Thursday.










 

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