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15/05/2007
Healthy house price rises for Australian capital cities outside of Sydney are a sign of a healthy economy, economists say...
But they say last year's interest rate rises have held back potentially stronger gains.
Average house prices went up by 1.1 per cent across Australia in the first three months of the year, the Australian Bureau of Statistics (ABS) said yesterday in its House Price Index report.
But the nation's largest housing market, Sydney, bucked the national trend to post a 0.4 per cent decline in the March quarter, growing at a rate of just 1.5 per cent in the past year.
National house prices rose 8.6 per cent in the year to the March quarter.
Rate rises affect the national market
ANZ economist Amber Rabinov said the three rate rises in 2006 had affected the national housing market.
"Although weighted average house price growth has picked up from the lows of 2004-2005, annual growth rates are far below those experienced at the peak of the house price boom in 2003.
"Nonetheless, in aggregate, strong prices for housing remain well supported by tightening housing market fundamentals, low rental vacancy rates and strong household incomes.
"Today's release is yet another indication that the Australian economy remains buoyant."
The mining boom continues to prop up Perth prices, which climbed a further 2.1 per cent in the March quarter, and by a chunky 32.1 per cent over the year. Prices in all other states and territories also increased.
In the quarter, Hobart led the way with a 3.8 per cent increase, followed by Brisbane at 2.9 per cent, then Darwin at 2.8 per cent. Then came Perth, followed by Adelaide with a 1.7 per cent increase, Melbourne at 1.5 per cent and Canberra at 1.2 per cent.
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