Australia's home prices rise at fastest clip in a year as rate cuts fuel demand

Core Insights - Australian home prices increased by 0.8% in September, reaching a record median value of A$857,280 ($565,462), marking the strongest monthly gain since October of the previous year [1] - The quarterly increase in home prices was 2.2%, compared to a 1.5% rise in the second quarter [1] Market Trends - The monthly price gain was broad-based, with Brisbane experiencing a 1.2% increase and Perth seeing a 1.6% surge, while Sydney rose by 0.8% and Melbourne lagged at 0.5% [2] - The spring selling season is anticipated to be strong, driven by low stock levels and high buyer demand, which are expected to further lift prices through spring and into the end of the year [2] Economic Factors - The Reserve Bank of Australia maintained interest rates at 3.60% but has cut rates three times this year as inflation slowed [3] - A new policy from the Labor government allowing first home buyers to enter the market with just a 5% deposit is expected to increase demand [3] Rental Market - The rental market is tightening, with national vacancy rates at a record low and rents rising by 0.5% in September, leading to a quarterly gain of 1.4%, the highest since June of the previous year [4]