Rate Cuts Propel Australian Property Prices to Record Highs

Australia's property prices hit a new record in June due to rate cuts and anticipated further cuts, amidst low supply and high demand. National home prices increased 0.6%, with Perth, Brisbane, and Sydney leading gains. The Reserve Bank's rate cuts and consumer confidence have bolstered the market.

In June, Australia's property prices soared to an all-time high, driven by rate cuts and anticipation of more reductions in the coming months, according to Cotality's latest data. The national home prices climbed 0.6%, reaching a peak of $837,586, marking the fifth consecutive month of growth following a brief downturn earlier this year.

The city of Perth led the charge with a notable 0.8% increase, followed by Brisbane and Sydney with 0.7% and 0.6% rises, respectively. Tim Lawless, Cotality's research director, cites falling interest rates as the primary catalyst, especially following the February and May rate cuts, which have sparked positive housing sentiment.

Despite the price surge, challenges remain with supply 5.8% lower than last year, and lending policies keeping a check on housing hype. Analysts predict space for further price hikes as consumer confidence rebounds, although affordability remains a concern amidst possible further rate reductions.

(With inputs from agencies.)