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SYDNEY, July 1 (Xinhua) -- Australian house prices rose by 0.5 percent in June according to Corelogic's June Home Value Index received on Friday.
Sydney and Melbourne posted the biggest gains when it came to Australia's capital cities, rising by over 11 percent in the past year.
Commonwealth Bank of Australian senior economist Michael Workman said in a note on Friday that today's 0.5 percent rise in June dwelling prices would not come as a surprise to those following the property markets in the major cities.
"The RBA's (Reserve Bank of Australia's) May rate cut, and the valid prospect of more cuts, have lifted buyer confidence into the traditionally more subdued winter housing market,"Workman said.
"June's price rise was mainly driven by the two major cities, Melbourne and Sydney experiencing reasonably firm economic growth, population and employment outcomes."
He noted that annual dwelling price growth for both cities was near 11 percent and well above the national outcome of 8 percent.
Brisbane recorded an annual price rise of 5.3 percent, Hobart was up 6.2 percent, Canberra 3.9 percent and Adelaide 2.2 percent.
Perth recorded an annual price fall of 4.7 percent while Darwin fell 1.1 percent.
"The two major issues looming for the housing markets are the record level of new supply to be delivered over the coming year and whether APRA (Australian Prudential Regulation Authority) will decide to tighten lending guidelines for mortgage providers,"Workman explained.
"New supply will dampen dwelling price rises."
He noted however that the detached housing market might remain resilient because most of the new supply was in multi-unit developments.
"APRA may delay a response if they consider that the subdued growth in investor housing credit reduces risks."
"The RBA will be weighing up the issues around housing markets but we expect them to cut the cash rate two more times over the rest of the year because of lower than expected inflation outcomes."
