Aussie house prices enjoy surprise rise

SYDNEY: House prices in Australia's major cities recorded a surprise increase last quarter, the first in more than a year and perhaps an early sign that recent cuts in interest rates are stabilising demand in what has been a very subdued market.

Yesterday's figures from the government showed prices for established houses in the major cities rose 0.5% in the second quarter, beating forecasts of a 0.5% fall. The first quarter was also revised to show a slight 0.1% dip, compared with an initial 1.1% drop.

Prices were still down 2.1% on the same quarter of 2011, but that was the slowest pace of decline in more than a year. The index of house prices was also just 4.7% below the all-time peak hit in 2010, a far smaller drop than suffered in say the United States or Britain.

By Reuters