SYDNEY, Oct 1 (Reuters) - Home prices in Australia’s capitals rose only marginally in September, slowing after three straight months of strong gains, with five of eight cities recording falls in the month.
The slowdown should actually be welcomed by the Reserve Bank of Australia (RBA)which recently has become concerned that a surge in borrowing to buy investment properties could lift prices to unsustainable levels.
The central bank is even considering whether banks should face tougher lending standards on some types of mortgages in an attempt to restrain investors.
Top RBA officials are due to appear before lawmakers on Thursday to answer questions on the housing market in the wake of the housing investment boom.
Figures from property consultant RPData-Rismark showed dwelling prices in Australia’s major cities rose just 0.1 percent in September, from August when they climbed 1.1 percent.
Prices were up 9.3 percent on September last year, again pulling back from August’s 10.9 percent pace.
“The annual rate of appreciation in dwelling values has actually been moderating since reaching a peak in April this year,” said RP Data research director Tim Lawless.
“A moderating annual trend, as well as the relatively flat September result, is likely to be welcome news to policy makers and potential buyers after the winter months recorded the largest capital gain since 2007,” he added.
The RBA has been especially concerned about the red-hot Sydney and Melbourne markets, and there were some tentative signs of a cooling there.
In Sydney, home prices rose by 0.8 percent in September from the previous month, but the annual pace of growth eased to 14.3 percent from 16.2 percent.
Prices fell by 0.8 percent in Melbourne for the month, while the annual pace slowed to 8.1 percent from 11.7 percent.
Still, the housing market remained strong overall with auction clearance rates above 70 percent and turnover high.
The median price of a home in Sydney was A$655,000 ($572,000), compared to A$535,000 in Melbourne and A$530,000 across all the major cities.
Rising home prices had been initially tolerated by policymakers as necessary to encourage a much-needed revival in home building, which is indeed underway. (Reporting by Wayne Cole; Editing by Eric Meijer)