Government stimulus boosts housing market

Submitted 2/04/2009

AAP

The Federal Government's stimulus package and a reduction in interest rates has given the housing market a modest boost, a new report shows.

The national survey of housing prices by RP Data-Rismark shows property values were up 1.1 per cent in the first two months of 2009, recovering from falls of three per cent in 2008.

The RP Data-Rismark national property value indices are determined using an automated system, which values every property in Australia each week based on sales nearby.

In Sydney, property prices were up 0.5 per cent for the three months to February, Melbourne prices lifted 1.9 per cent and Darwin prices were up 6.1 per cent.

Prices fell in other capital cities, with Brisbane value down 2.2 per cent, Adelaide prices dropping 1.3 per cent, Perth falling one per cent and Canberra down 1.8 per cent.

RP Data senior research analyst Cameron Kusher said the government's stimulus package, which doubled the first home owner's grant from $7000 to $14,000 for pre-existing homes, pushed more buyers into the market.

"The first homebuyers grant has been a very successful initiative and you can see that by how many first home buyers are out there getting finance commitments," Mr Kusher told AAP.

A sharp reduction in interest rates had also pushed the market up, Mr Kusher said.

"People that even five or six months ago probably weren't even able to dream about owning a property ... they're realising that it's a pretty good time to go out there and buy," he said.

The most expensive houses were in Sydney, with a median price of $559,360 while the least expensive were in Adelaide at a median price of $407,020.