House prices across Australia rallied to record highs in October following moderate gains in September according to new figures from the RP Data-Rismark Hedonic Index.
National dwelling prices climbed by 1.4% in October to $496,398. During the first 10 months of 2009, national dwelling values jumped by 10%.
Cameron Kusher, senior research director with rpdata.com said that the strong growth throughout October after a slowdown in September show that the market is very resilient and the 0.25% rate hike during October has not immediately impacted the market. However he expects that further rate rise over the next 12 to 18 months would result in a more normal growth.
Christopher Joye, managing director of Rismark International added that "Although we forecast a resilient recovery in 2009, we have been surprised on the upside by the strength of conditions, which reflects Australia's better-than-expected employment and growth outcomes."
Despite the strong growth in values, Joye noted that Australia's home values are not that expensive compared to overseas markets.
"According to our analysis of all home sales in Australia, the median Australian home value is only four times average disposable household incomes. This is inconsistent with claims that Australian dwelling prices are 6-8 times household incomes. People forget that 40% of housing stock is not located in the capital cities."
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